“It is not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden … ‘even interstate business must pay its way,’” as held in Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 254 (1938). It is axiomatic that conducting business does not preclude corporations from taxes assessed on sales. Yet, for years, two cases, National Bellas Hess v. Department of Revenue of Illinois, 386 U.S. 753 (1967), and Quill Corp. v. North Dakota, 504 U.S. 298 (1992), created a test rooted in jurisprudence that conflicted with these maxims. The Supreme Court’s decision on June 21, 2018, South Dakota v. Wayfair, Inc., No. 17-494, 583 U.S. __ (2018), removed the physical presence rule in favor of an analysis that is better aligned with our modern commerce clause jurisprudence. The physical presence rule shielded out-of-state sellers from collecting or remitting sales or use taxes if they were not physically present in the state. So why all the hubbub?

The internet spurred new industries and fostered global economic growth. In the United States, e-commerce retail sales outpace sales in “brick and mortar” stores. Online sales outcompete physical stores to such an extent that the BBC, Business Insider, and other publications mourn the death of the traditional American mall. The hubbub is as follows: Before the Supreme Court’s decision, online retailers like Amazon, Newegg, and eBay could circumvent state sales taxes if they merely transacted with state residents without other substantial connections to the state. Now, a state can levy sales taxes on online transactions irrespective of the corporation’s presence within the state.