Likely That Not All Internet/Web Sales Into a State will be Subject to State and Local Sales Taxes

In South Dakota v Wayfair, Inc., the U.S. Supreme Court overruled its prior precedent regarding sales tax on interstate sales and imposed state sales tax on sellers of merchandise who had no physical location or presence in South Dakota into South Dakota via the Internet .

OLD LAW. National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753 (1967) and Quill Corp. v. North Dakota, 504 U.S. 298 (1992) had previously held that an out-of-state seller’s liability to collect and remit the tax to the consumer’s State depended on whether the seller had a physical presence in that State, and that mere shipment of goods into the consumer’s State, following an order from a cata­log, did not satisfy the physical presence requirement.

GENERAL COMMERCE CLAUSE LIMITATIONS ON TAXATION OF INTERSTATE SALES. State regulations may not discriminate against interstate commerce, and may not impose undue burdens on interstate commerce. State laws that “regulat[e] even-handedly to effectuate a legitimate local public interest . . . will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefit”. In Complete Auto Transit, Inc. v. Brady, 430 U. S. 274 (1977), the Court held it would . . .

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