Economic Nexus At A Glance
To understand the Wayfair Supreme Court decision, we first have to go back 26 years. In 1992, the Supreme Court heard a case between a company known as Quill and the state of North Dakota. North Dakota wanted Quill, a company with no direct ties to ND, to remit sales tax. The supreme court decided since Quill had customers but no offices there, it didn’t have to collect sales tax. No presence, no tax.
In 2018, South Dakota set out to challenge this ruling. The state pointed out the ruling did not factor in internet retailers. In South Dakota’s view, Quill was obsolete. It simply wasn’t the same world. Additionally, South Dakota claimed with Quill in place the explosion of online purchases caused a massive loss of state revenue.