Citation:South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018).
Why This Case Was a Turning Point
Wayfair overturned decades of precedent fromQuill(1992), allowing states to require remote sellers to collect sales tax based on sales volume, not physical presence. The Court emphasized that e-commerce blurred state lines and physical presence no longer captured modern commerce.
Big shift:“Economic nexus” lets states set revenue/transaction thresholds (e.g., $100,000 in sales or 200 transactions) that trigger collection duties for remote sellers.
How It Affects Everyday Citizens
- Online prices now include sales tax:Consumers see more consistent tax on remote purchases, reducing surprises at filing time.
- Fairness for local stores:Main-street businesses no longer compete with online sellers on a tax-free price gap.
- Better-funded state services:Sales tax collections now flow to states even when purchases come from out-of-state retailers, supporting schools, roads, and safety nets.
Impact on Small Businesses
Wayfair created compliance complexity for small and mid-sized online sellers who must track thresholds in multiple states, register, collect, and remit. States responded with simplified systems (e.g., SST states) and safe harbors, but compliance software costs and filing burdens increased.
Practical Takeaways
- Track your revenue by state monthly to see if you cross any economic nexus thresholds.
- Use sales tax automation tools to manage rate changes and filing calendars.
- Consider marketplace facilitator rules—many platforms now collect on your behalf.
Need help with post-Wayfair compliance?
We help remote sellers and marketplace merchants register, collect, and remit correctly.
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