In the landmark case of South Dakota v. Wayfair, the US Supreme Court overturned the Quill physical presence standard, finding it “unsound and incorrect.” Justice Anthony Kennedy delivered the opinion of the Court, stating that Quill imposes the sort of arbitrary, formalistic distinction that modern Commerce Clause precedents disavow in favor of a sensitive case-by-case analysis of purposes and effects.
The Court concluded that the doctrine of stare decisis no longer can support the prohibition of a valid exercise of the state’s sovereign power. The Court noted that South Dakota law includes several features intended to prevent undue burdens on interstate commerce, which include no obligation to retroactively remit the sales tax. The case was remanded for proceedings not inconsistent with the opinion.
Types of companies who may be impacted: