Supreme Court Rules On Internet Sales Tax

June 21, 2018

Today, the Supreme Court issued its ruling in the Internet sales tax case of South Dakota v. Wayfair, ending the long-standing, black and white physical presence sales tax collection standard. Ending the Quill nexus standard allows a state to impose sales tax burdens on large retail businesses who do not have employees or facilities inside the state’s borders.  

The South Dakota sales tax law that led to the end of the Quill standard targeted larger Internet retailers. Each of the three retailers brought to court - Wayfair, Overstock and Newegg - sells more than $1 billion per year, and in some cases much more. The Court’s decision states that the South Dakota law “applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence.”

“While we are obviously disappointed to see Quill’s standard overturned, we are pleased that the Court was very clear about the importance of protecting small businesses from unfair burdens,” said Cathy Foster, VP of Global Government Relations and Public Policy at eBay. “If state tax authorities attempt to subject remote small businesses to expensive audits and lawsuits, there will be increased litigation across the country to protect small businesses from unfair burdens.”

eBay is committed to supporting its sellers and helping them continue to grow their businesses. The eBay Government Relations team will continue to encourage Congress to step in and provide clear tax rules, with a strong small business exemption, to help small businesses take advantage of the Internet to create local jobs. If you want to make your voice heard, click here to sign our petition.