On June 21, 2018, the U.S. Supreme Court in South Dakota v. Wayfair, Inc., et al., decided (5-4 although not the usual liberal/conservative split) that an online retailer does not have to maintain a physical presence in a state in order to be required to collect the state’s sales and use tax. This opinion overturns the pre-internet era 1992 precedent of Quill v. North Dakota, finding that Quill was erroneously decided. This decision says that the doctrine of stare decisis cannot support upholding Quill, and that the internet revolution made the Court’s erroneous holding in Quill “all the more egregious and harmful.” The opinion says that a taxpayer cannot rely on stare decisis where the purpose is tax avoidance. Although the Court did not address whether this decision is retroactive, because the South Dakota law at issue is not retroactive, it did not limit its holding prospectively.

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