Ian’s Legal Fact of the Week 10/15/18: Sales Tax and Online Shopping

In June of this year the Supreme Court altered the online retail landscape in South Dakota v. Wayfair, Inc. (2018). In a 5-4 decision, the Court overruled Quill Corp. v. North Dakota (1992), which held that the Dormant Commerce Clause prevented states from requiring sellers without a ‘physical presence’ in the state to collect sales or use taxes, ruling that the decision was “unsound and incorrect” given the “Internet’s prevalence and power have changed the dynamics of the national economy.” In his dissent, Justice Roberts agreed that previous precedent had been “wrongly decided” but believed stare decisis weighed heavily against overruling Quill and that it was the job of Congress rather than the Supreme Court to change law in this area. As a result of this ruling, many states have passed or are drafting laws requiring remote sellers to collect sales tax, so online buyers will soon have to start paying state and local sales tax on many of their purchases.

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