Taxing Online Sales: Impact of the South Dakota v. Wayfair Decision

Posted on 09-12-2018

Includes Analysis by: Carolynn Kranz, Kranz & Associates PLLC Mark Muntean, Charles Swenson and Iris Kitamura, Kranz & Associates PLLC

This article discusses the impact of the U.S. Supreme Court’s landmark decision in South Dakota v. Wayfair, Inc.1 and provides guidance related to resulting changes. In addition to evaluating the ruling in Wayfair and the precedents that went before it, this article offers a primer on the fundamental concepts of state sales and use tax principles underpinning Wayfair, including substantial nexus, economic nexus, physical and economic presence, the Commerce Clause, the dormant Commerce Clause, and the Due Process Clause.

THE COURT’S RULING IS OF VITAL IMPORTANCE TO TAX practitioners because of its sales and use tax collection impact that will reach large and small companies’ internal processes and compliance systems. Attorneys who represent remote sellers and e-retailers should evaluate the ruling’s implications with respect to their e-retailer clients’ new burdens to record, collect, and remit sales tax from many state and local tax jurisdictions.

Sales Tax Overview

The Wayfair ruling overturns prior Supreme Court precedent in Quill Corp. v. North Dakota2 and Nat’l Bellas Hess v. Dep’t of Revenue.3 In the Quill and Bellas  Hess decisions, the Court ruled that out-of-state sellers are obligated to collect and remit sales tax on in-state sales only where the company has a physical presence. The Wayfair ruling overturns Quill, with the majority opinion holding that it was the Court’s obligation to make amends for Quill’s unsound and incorrect reading of the Commerce Clause. Conversely, Chief Justice Roberts and his fellow dissenters felt that the Wayfair ruling exemplified a Court that was overstepping its authority, as it should be the responsibility of Congress to change the physical presence standard.

Sales and Use Tax Nexus v. Income Tax Nexus

Nexus means the minimum level of activity a taxpayer must have in a state before that state has the right to tax the taxpayer. For corporate income tax purposes, several states have adopted an economic nexus standard for determining whether an out-ofstate taxpayer is subject to tax on its business income in the state. Economic nexus is premised on a theory of regular and continuous exploitation of the in-state market. Thus, a certain amount of a taxpayer’s business income can be apportioned to the state if the level of activity in that state meets a prescribed threshold, regardless of whether the taxpayer ever sets foot in that state.

Commerce Clause, Dormant Commerce Clause, and Due Process Analysis

The foundational principles of state taxation involve the Commerce Clause and the Due Process Clause. These concepts are important in evaluating Wayfair because state taxation cases hinge upon whether the state’s system of taxation interferes with interstate commerce. Also of importance is the dormant Commerce Clause, which was used to decide Quill.

Commerce Clause

The Commerce Clause4 addresses the right of the federal government to regulate interstate commerce. With state tax cases, the initial evaluation is whether the state’s system of taxation interferes with the principles of interstate commerce. In order to satisfy the Commerce Clause, the activity taxed must have a substantial nexus to the taxing state.

Dormant Commerce Clause

The Quill court based its ruling on the dormant Commerce Clause, the legal doctrine that prevents a state from interfering with interstate commerce unless Congress gives its authorization. However, in Quill, the Court ruled that the dormant Commerce Clause did not prevent North Dakota from imposing a sales tax on online retailers located out of the state.

Due Process Clause

The Due Process Clause5 is rooted in the concept of fairness to the selling business. The seller needs to have nexus with the state. If the seller does not have physical presence in the state, then the state cannot force the seller to collect taxes on behalf of that state. Due process issues are the exclusive domain of the courts. Due process, though, does not mandate physical presence. Due process considers whether the individual has enough nexus to meet the standards of fairness.

State Sales and Use Tax Principles

The essence of the Wayfair case is the collection and remittance responsibilities of out-of-state sellers. In other words, the case focuses on the ability of states to require internet sellers that reach out to in-state consumers to assess, collect, and remit sales taxes to the state. While the use tax mechanism supplements the sales tax mechanism, the use tax relies on taxpayers to assess their own tax liability. As a result, many taxable purchases are unreported or underreported, and a significant amount of revenue is lost. In fact, the Government Accountability Office has estimated that the Quill case’s prohibitions against collecting sales tax cost the states over $13 billion last year.6

Sales Tax

For many years, most states have relied heavily on the collection and remittance of sales and use taxes to generate revenue. Generally, the seller has the primary responsibility to collect and remit sales tax to the state. When sales concern in-state sellers, this is not a problem. Clearly, there is a connection between the state and the taxpayer. The collection and remittance of tax becomes more complex, though, when out-of-state sellers engage in transactions with in-state customers.

Use Tax

States that impose sales tax also impose a complementary use tax for those transactions in which the in-state customer purchases tangible personal property outside the state for use in the state and for which sales tax has not been imposed on the transaction. So, for example, if you live in New York and purchase an item in New Hampshire for use in New York, you still have an obligation to pay use tax to New York, the state in which you live and where you are going to use the property. Consumers usually fail to pay the use tax because it is self-assessed. The taxpayer’s failure to pay use taxes was a factor in South Dakota’s actions in Wayfair.

Complete Auto Transit, Inc. v. Brady

Complete Auto Transit, Inc. v. Brady7 is at the foundation of much of state and local taxation, particularly state sales and use tax. The Court’s ruling in Complete Auto provides the following four-pronged test to determine whether a state tax is constitutional:

  • The tax can be applied only to an activity having a substantial nexus with the taxing state.
  • The tax is fairly apportioned
  • The tax does not discriminate against interstate commerce.
  • The tax is fairly related to the services provided by the states.

Wayfair focuses on the first prong of Complete Auto, where the Court explained that, for a state tax obligation to pass constitutional muster for purposes of the dormant Commerce Clause, the tax must be “applied to an activity with a substantial nexus with the taxing State.”8

Nat’l Bellas Hess v. Dep’t of Revenue

Bellas Hess involved a Massachusetts mail order business that had no property, office, outlets, or sales representatives in the state of Illinois. The Court held that under the dormant Commerce Clause, a state could not require retailers without a physical presence in that state to collect taxes on the sale of goods to its residents.9

Quill Corp. v. North Dakota

In Quill, the seminal case for sales and use tax nexus since 1992, the Court expanded on the concept of nexus for purposes of state taxation. The Quill Court stated that nexus consists of both a minimum contacts analysis under the Due Process Clause and a substantial nexus test under the Commerce Clause.10 In addition to addressing the concept of nexus, the Quill case is vital because it established the concept of physical presence, which the Wayfair case has reversed.

Quill Corporation was a mail-order company that distributed office equipment and supplies and sold its products to North Dakota buyers through catalogues. The company did not have a physical presence in North Dakota and did not collect state sales tax on its sales to North Dakota customers. The Court held that an out-ofstate retailer was not required to collect and remit sales tax on remote sales to an in-state purchaser if the retailer did not have a physical presence in the state. The Quill decision reaffirmed the Court’s Bellas Hess decision. In order to satisfy the Commerce Clause’s substantial presence test, a physical presence was needed. Justice John Paul Stevens, author of the majority opinion in Quill, stated that taxing out-of-state businesses would “unduly burden interstate commerce.”11

Did Quill meet the Due Process and Commerce Clause Standards?

In Quill the Court applied separate Due Process Clause nexus and Commerce Clause nexus requirements in its analysis of whether the corporation had the requisite nexus to North Dakota. The Court decided that there was sufficient nexus under the Due Process Clause, but not under the Commerce Clause, because physical presence in the state was required.

Due Process

The Due Process Clause is vital in a state tax case because it is the constitutional glue that requires that a state have a sufficient relationship with a person to justify exercising jurisdiction. In the important due process case International Shoe Co. v. Washington, the Court explained that due process standards are met if there are sufficient minimum contacts with the state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.”12

Due process does not require physical presence; instead, due process is concerned with giving an individual notice and fairness. To meet the due process standards, purposeful direction of the seller’s activities at the state’s residents must be shown, and the tax has to be related to the benefits that the seller derives from the state. The Quill case may have met these standards.

The Court ruled that Quill, Inc. had sufficient nexus to the state of North Dakota under the Due Process Clause because the company had “purposefully directed its activities at North Dakota residents, that the magnitude of those contacts is more than sufficient for due process purposes, and that the use tax is related to the benefits Quill receives from access to the State.13” In short, the Quill Court ruled that physical presence is not required for specific jurisdiction with respect to due process.

Commerce Clause

Although the Quill Court stated that there is a close relationship between the Due Process Clause nexus and Commerce Clause nexus, the company did not have substantial nexus under the Commerce Clause because it lacked actual physical presence in the state. Under Quill, to meet the test for sufficient nexus for the Commerce Clause, a business needed to be more than a mail order operation; the business was required to have a retail store in the taxing state or office space in the taxing state.

Under the Commerce Clause, there is a higher standard so as to not impose a burden on interstate commerce. In short, “a corporation may have the minimum contacts with a taxing state as required by the Due Process Clause and yet lack the substantial nexus with that state as required by the Commerce Clause.14” The purpose of the Commerce Clause is to prevent discrimination against interstate commerce. The Commerce Clause is not concerned with fairness, but rather, what are the effects of state regulation to the broader national economy

South Dakota v. Wayfair

Wayfair is a challenge to the Quill physical presence standard arising as a result of the growth of e-commerce. Because under Quill sellers were not required to collect sales tax on sales made to customers where the seller was not physically present, the in-state purchaser was not charged sales tax. Although the purchaser had a requirement to pay use tax on these tax-free purchases, use tax compliance was very low.

In Wayfair, the Court held that the Quill and Bellas Hess Courts had incorrectly interpreted the Commerce Clause.15 As a result, retailers can no longer rely on the physical presence test to determine remote seller nexus. The Court held that the economic nexus standard outlined in the South Dakota statute, 2016 S.D. S.B. 106 (S.B. 106), met the requirements of the Commerce Clause because it was not overly burdensome to remote sellers. In addition, the sales and transaction-based nexus thresholds were coupled with non-retroactive application and South Dakota’s participation in the Streamlined Sales and Use Tax Agreement (SSUTA).

Background to Wayfair / S.B.106

In 2016, South Dakota challenged the inequalities of Quill by enacting S. 106: “An Act to provide for the collection of sales taxes from certain remote sellers, to establish certain Legislative findings, and to declare an emergency.” The legislature found that the inability to collect sales tax from remote sellers was “seriously eroding the sales tax base” and “causing revenue losses and imminent harm . . . through the loss of critical funding for state and local services.” 16

S.B. 106 created an economic nexus test requiring a remote seller that did not have a physical presence in the state to register, collect and remit sales tax if, in the previous calendar year, the seller met the following thresholds:

  • The seller had over $100,000 of gross revenue from the sales of tangible property, digital property transfers, or services in South Dakota.
  • The seller engaged in 200 or more separate transactions in tangible property, digital product transfers, or services delivered within the state of South Dakota.

S.B. 106 foreclosed the retroactive application of these requirements and provided means for the statute to be appropriately stayed until the constitutionality of the law had been clearly established.17 South Dakota’s intention was for retailers outside of South Dakota meeting these thresholds to collect South Dakota sales tax and remit the tax to South Dakota. South Dakota sued several out-of-state retailers, including Wayfair,, and Newegg.

South Dakota’s goal was for Quill to be overturned. South Dakota filed a declaratory judgment in its state court against specific internet merchants with no employees or office buildings in the state who also failed to collect sales tax on their internet sales. South Dakota also sought an injunction to force these internet merchants to register for business licenses in the state and to remit sales taxes to the state. In response, the merchants moved for summary judgment, stating that S.B. 106 was unconstitutional. The South Dakota courts sided with the merchants, holding the law to be unconstitutional, and in turn, the Supreme Court granted certiorari.

As noted above, the Court referenced South Dakota’s participation in the SSUTA as a factor to consider in upholding the constitutionality of the law.18 The purpose of the SSUTA is to simplify and modernize sales and use tax administration in its member states to substantially reduce the burden of tax compliance. The agreement focuses on improving sales and use tax administration systems for all sellers and for all types of commerce.

Majority Opinion

Justice Anthony Kennedy wrote the majority opinion, and he was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito, and Neil Gorsuch. Justices Thomas and Gorsuch filed separate concurring opinions. Justice Kennedy’s opinion begins with a detailed analysis of Commerce Clause jurisdiction.

The majority held Quill’s physical presence test to be unsound and incorrect. The Court ruled that a business did not need a physical presence to meet the substantial nexus requirements outlined in Complete Auto Transit. The majority analogized Quill to a tax shelter whereby businesses were using technology to avoid their physical presence and still sell their goods and services to a state’s consumers.19

What is vital to understand is that Wayfair rejected the physical presence of Quill. However, the constitutionality of S.B. 106 was not determined in its entirety. Instead, the Court held that S.B. 106 satisfied the substantial nexus requirement of Complete Auto as that requirement applied to Wayfair and remanded the case to the lower court to ascertain whether all four prongs of the Complete Auto test are met.20

Wayfair Concurrence and Dissent Summaries

Justice Thomas’ Concurrence

In Justice Clarence Thomas’ concurrence in Wayfair, he offered his regret for not voting to overrule Bellas Hess in Quill. Only Justice White voted to overrule Bellas Hess, and Thomas stated that he should have joined him in that dissent. Thomas explained in his concurrence that twenty-five years of experience had taught him that Bellas Hess and Quill “can no longer be rationally justified.”21

Justice Gorsuch’s Concurrence

Justice Neil Gorsuch discussed the lack of cohesion between the concept of nexus in the dormant Commerce Clause and the Commerce Clause. He honed in on the mistake of his predecessors on the Court in creating a judicial tax break for out-of-state internet and mail-order companies at the expense of brick and mortar Main Street business. Justice Gorsuch underscored the need of the Court to do some housekeeping on the disconnect between the Commerce Clause and the negative, or dormant, Commerce Clause. He noted that the dormant Commerce Clause cases suggest that Article III courts may invalidate state laws that offend no congressional statute. Justice Gorsuch noted, though, that how this can be reconciled with the express language of the Commerce Clause or justified by stare decisis were questions for another day.22

Chief Justice John Roberts’ Dissent in Wayfair

Chief Justice John Roberts wrote the dissent for the Court, joined by Justices Stephen Breyer, Elena Kagan, and Sonia Sotomayor. Although the dissenting opinion agreed that Bellas Hess was wrongly decided, the dissenters opined that it was Congress’ job to alter the physical presence rule.23 The dissent cited the fact that e-commerce is a significant component of our national economy. The dissenters believed that a disruption of the physical presence rule would serve to disrupt economic policy, of which Congress is in control.24

Wayfair Winners and Losers

So, who are the winners and losers in the fight over sales tax collection? Tax attorney and author Mark Muntean says that brick and mortar businesses may be winners, while online retailers are the obvious losers (as well as consumers, who will pay additional taxes). Brick and mortar stores will no longer be at a price disadvantage. Muntean thinks that states may not be big winners, though.

At first blush, states may see themselves as the big winners in cheering the end of Quill’s physical presence test. It is reasonable to expect states to begin to broaden their legislation in an effort to expand their online sales tax collections, now that states can require online retailers to collect sales tax even where the retailer has no physical presence in the state subject to the limitations provided by the Court. However, the limitations on state taxation may be problematic for some states. State legislatures eager to increase tax revenues can end up discriminating against interstate commerce or imposing undue burdens on interstate commerce.25

What is Next?

For the parties involved in Wayfair, the next step is for the lower court to resolve those issues that the Court directed to resolve on remand. As the Court noted, since the issue of physical presence was the focal point of the case, and under the Quill standard the lack of physical presence would have invalidated the law, other issues that arise with respect to satisfaction of the Commerce Clause requirements were not briefed or litigated.26 Thus, the Court remanded the case to the lower court for a determination as to whether the law satisfies the Commerce Clause requirements that it not discriminate against, or place an undue burden on, interstate commerce. The law must still meet the applicable four-pronged test of Complete Auto to satisfy its constitutionality. The Court did tip its hand when it listed the reasons that the law would be constitutional, including noting the relative ease of its compliance requirements, the standardized system of collection that reduces administrative costs and burdens, its participation in the SSUTA, and its safe harbor threshold.

Other State Laws

Currently, there are 31 states that have enacted laws that are similar, but not necessarily identical, to that of South Dakota for imposing collection responsibilities on sellers with respect to internet sales. The decision in Wayfair does not give states a free pass, but requires that these states examine how closely aligned their laws are with the South Dakota law

While remanding the case to the state court for a determination as to the Commerce Clause, Justice Kennedy addressed concerns that South Dakota’s tax system could result in discrimination against, or undue burdens on, interstate commerce. In his opinion, Justice Kennedy noted that South Dakota has a standardized collection mechanism built in to it, and the state’s tax system includes several mechanisms to prevent discrimination against, or undue burdens on, interstate commerce.27 The Court was supportive of South Dakota’s sales tax law because the state took steps to ensure that the Commerce Clause was not violated. Among the steps taken were:

  • South Dakota provided out-of-state retailers with free software to assist them in complying with its sales tax. South Dakota has a single, centralized tax collection agency, and taxpayers are not required to deal with individual city or county taxing authorities to collect and remit local taxes.
  • As a participating member state in SSUTA, South Dakota has adopted a simplified and uniform mechanism to alleviate compliance burdens for multistate taxpayers in the sales and use tax realm.

Safe Harbor Threshold

One of the considerations as to the constitutionality of the South Dakota law was the fact that the law has a safe harbor threshold of $100,000 or 200 transactions. How does this impact other states with thresholds lower than South Dakota or that do not have thresholds built in to the law? For small businesses doing limited business across state lines, this can have significant impact. The Court found that the South Dakota law was not a burden on interstate commerce in part because it did not place an undue burden on small businesses or small taxpayers engaged in a minimal level of interstate activity. Whether the failure to incorporate a threshold level of activity in a law would affect the constitutionality or validity of the law remains an outstanding issue.

If Congress does decide to address the issue of marketplace fairness, the level of activity is one that would have to be worked out. With modern technology and the relative ease of reporting, particularly in those states that participate in the SSUTA, even the low threshold level of $100,000 would most likely not unduly burden relatively small sellers.

Retroactive Application?

Another consideration for practitioners in other states is whether the standard enunciated by the Court can be applied retroactively. Although it is not a consideration in South Dakota, whose law provides for prospective only application, some practitioners have expressed concerns that those states that are searching for much needed revenue and that do not have a built-in prospective application will aggressively seek to have the Wayfair decision applied retroactively. Despite retroactivity not being an issue in this case, Justice Kennedy’s majority opinion did note that the South Dakota law is prospective only, but he did not elaborate on what this meant with respect to earlier transactions. If, as the majority indicated, Quill was a misapplication of substantial nexus, and the standard should not have required physical presence, then to what extent can the law exclude the physical presence requirement in determining substantial nexus? Although it seems unlikely that any law would be applied retroactively, the possibility remains open.

Compliance Issues?

The Court found that the state's participation in the SSUTA reduced the potential to impose undue compliance burdens. The SSUTA, which simplifies compliance for taxpayers who engage in transactions across state borders, contains several simplification and uniformity requirements that participating states must adopt to remove or reduce the undue burdens on all sellers.

The Court noted that “South Dakota’s tax system includes several features that appear designed to prevent discrimination against or undue burdens upon interstate commerce,” including membership in the Streamlined Sales Tax Governing Board. The Court explained that, “[t]his system standardizes taxes to reduce administrative and compliance costs: It requires a single, state level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules. It also provides sellers access to sales tax administration software paid for by the State.”28

Attorneys Carolynn S. Kranz and Iris M. Kitamura, who specialize in local and state tax issues, assert that only states that have adopted the provisions of the SSUTA and have addressed retroactivity and small business protection should be convinced that Wayfair is a win.

However, non-member SSUTA states, like Connecticut, Hawaii, and Louisiana, that have not adopted the simplified SSUTA framework that the Court noted provided certain protections, may face a challenge to any assertion that their economic nexus laws pass constitutional muster under Wayfair. The Court warned that “[c]omplex state tax systems could have the effect of discriminating against interstate commerce.” Certainly, the U.S. Supreme Court’s decision in Wayfair should prompt more states to consider adoption of the SSUTA. 29

Congressional Action?

Congress has been given the opportunity in recent years to apply a uniform standard to the issue of marketplace fairness and remote sellers. Although several bills have been introduced to address the issue, none has made it out of the House or Senate. In light of Wayfair, Congress might want to consider the need for uniformity and consistency in multistate transactions, particularly those conducted in e-commerce.

Muntean suggests that online retailers may look to Chief Justice Roberts’ dissent for their best strategy going forward.

The Chief Justice noted that Congress has in fact been considering whether to alter the rule established in Bellas Hess for some time. . . . In 2018, three bills addressing the issue were pending in Congress. The Chief Justice stated that the Wayfair decision does nothing to stop Congress from continuing to seek a legislative solution. . . . Congress may consider a national solution, such as a national sales tax, preempting state sales tax all together. The revenue from a national sales tax could be remitted back to the states on an equitable basis.30

Impact of Wayfair on State and Local Income Taxes

While the Wayfair decision applies to the imposition of sales taxes, Professor Charles Swenson foresees potential income tax implications as well.

In the past, states have generally applied a physical presence standard to income tax nexus. States have modified this to the extent that a company’s affiliates or agents have such physical presence. But states have also increasingly used an economic nexus standard, whereby the company is deemed to have enough activities in the state as exhibited by significant activities in the state aimed toward establishing and maintaining a market. As a result, a number of states31 have adopted factor presence nexus, whereby nexus is established if sales exceed a certain threshold. With the language and logic in Wayfair, states may feel more emboldened to employ similar laws. This may be enabled by state department of revenue data showing which companies filed sales tax returns in a state under new Wayfair-based sales tax laws. The practitioner and companies should, in addition to monitoring state rules on sales tax, keep a wary eye on income tax law changes as well.32

Guidance for Businesses and Their Legal Counsel

Kranz and Kitamura provide this advice for businesses who are unsure on how to proceed after Wayfair.

From a practical standpoint, businesses should closely follow what the individual sales tax states are doing legislatively and administratively. They should plan for implementation of sales tax collection. And most importantly they should, through advisors, proactively reach out to state taxing authorities for guidance. In this time of transition, where the state sales and use tax landscape has been turned upside down, taxpayers need the certainty that they will receive only by engaging in discussions with the states that are proceeding based on Wayfair.33

Professor Swenson urges legal counsel to work with their business clients to ensure that their clients’ sales tax software will meet the requirements of Wayfair.

Practitioners will need to monitor state tax authorities’ actions to see if and when sales threshold rules are put into place. Unlike nexus studies in the past where a more complex set of criteria were examined, going forward practitioners will now need to advise their clients to keep track of sales by state to see if state sales thresholds are exceeded, in which case those clients would be required to collect tax. To the extent that clients are already using software to administer sales taxes, the scope of such software may have to be expanded to the extent the client has new states requiring sales tax collection. And for those new states, additional compliance will be required to the extent that there are over 9,000 taxing jurisdictions and a myriad of exemptions and exclusions depending on jurisdictions. Relatedly, the practitioner may need to guide the client through exemption certificates and collection responsibilities for each new jurisdiction.34

Mark Muntean, J.D., LL.M. Taxation (Georgetown) is a business and tax lawyer in the San Francisco Bay Area of California with nearly 40 years of experience in federal, state, and international tax matters. He represents clients in connection with IRS and state tax matters, excise tax matters, criminal tax issues, mergers and acquisitions, private equity, and other business law matters. Mr. Muntean is a regular contributor to the Lexis Quarterly Tax Journal, is the co-author of Ballantine & Sterling California Corporate Laws (Matthew Bender), and is the author of Business Organizations: Professional Corporations and Associations (Matthew Bender). Charles Swenson, CPA, PhD, is Professor and Leventhal Research Fellow at the Marshall School of Business at the University of Southern California. He is also the co-founder of An author of more than 50 articles and books, he is General Editor of Bender’s State Taxation: Principles and Practice (Matthew Bender). Carolynn Kranz is the founder and managing member of Kranz & Associates PLLC (, a boutique law firm specializing in state and local tax matters in the 50 states and District of Columbia. She is also the founder and managing member of Industry Sales Solutions, LLC, a company that offers a subscription database containing the sales and use taxability of software related transactions. In addition to her sales and use tax expertise, Carolynn has significant experience in state and local income / franchise tax, as well as federal tax matters. Iris Kitamura is an associate at Kranz & Associates, PLLC, a law firm specializing in state and local tax consulting. Iris specializes in state and local tax matters on a multistate basis, particularly in the area of sales and use taxes. She has over 15 years of experience in state and local taxation and contributes to the LexisNexis publication State Tax Guide to Digital Content and Cloud Services, and co-authored “Taxing Software and Cloud Computing: Yesterday’s Law and Today’s Technology,” Tax Analysts Special Report (2011).

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1. 201 L. Ed. 2d 403 (2018). 2. 504 U.S. 298 (1992). 3. 386 U.S. 753 (1967). 4. U.S. Const. Art. I, § 8, Cl 3. 5. U.S. Const. Amend. XIV § 1. 6. See GAO, Report to Congressional Requesters: Sales Taxes, States Could Gain Revenue from Expanded Authority, but Businesses Are Likely to Experience Compliance Costs 5 ((GAO–18–114, Nov. 2017) (Sales Taxes Report)). 7. 430 U.S. 274 (1977). 8. Id. at 279. 9. Nat’l Bellas Hess, 386 U.S. at 760. 10. Quill, 504 U.S. at 313. 11. Id. 12. 326 U.S. 310, 316 (1945). 13. Quill, 504 U.S. at 308. 14. Quill at 313. 15. Wayfair, 201 L. Ed. 2d at 426. 16. 2016 S.D. S.B. 106. 17. Id. 18. Wayfair, 201 L. Ed. 2d at 426. 19. Id. at 411. 20. Id. at 427. 21. Id. at 428. 22. Id. at 428. 23. Id. 24. Id. at 432. 25. Mark Muntean, South Dakota v Wayfair: The Evolution of State Sales Tax, 2018 Emerging Issues 8655. 26. Wayfair, 201 L. Ed. 2d at 426. 27. Id. at 425. 28. Id. at 426-427. 29. Carolynn S. Kranz and Iris M. Kitamura, Streamlined Sales Tax States Win, Will Others Follow Their Lead?, 2018 Emerging Issues 8657. 30. Muntean, supra note 25. 31. California (Cal. Rev. & Tax. Code § 23101(b)), Colorado (Colo. Rev. Stat. § 39-22-301(2)), Connecticut (Conn. Gen. Stat. § 12-216a(a), Informational Publication 2010 (29.1)), New York (N.Y. Tax Law § 209(1)(b)), Ohio (Ohio Rev. Code Ann. § 5751.01(I)), and Washington (Wash. Rev. Code Ann. § 82.04.067). 32. Charles Swenson, A New Paradigm for Sales Tax: The Wayfair Decision and Nexus, 2018 Emerging Issues 8656. 33. Kranz and Kitamura, supra note 29. 34. Swenson, supra note 32.