Another Dakota Takes on Physical Presence
03/10/2017On 3/16/17, the Sixth Judicial Court of South Dakota overturned the State’s recently-enacted remote sales tax law, SDCL Chapter 10-64, in South Dakota v. Wayfair Inc.
The challenge to the South Dakota law parallels that of its neighbor, North Dakota, where the trial court struck down the state’s statute requiring a retailer without a physical presence in the state to collect sales tax in a summary judgment decision. State v. Quill Corp., 470 N.W.2d 203 (N.D. 1991), rev’d by 504 U.S. 298 (1992). Whether Wayfair is taken up by the U.S. Supreme Court remains to be seen, but states and taxpayers alike are looking for guidance on the future of the physical presence requirement under Quill. Indeed, a number of states have adopted regulations or policy positions similar to South Dakota; few, however, have gone as far as South Dakota in enacting a statute on remote sales tax collection.