By Erika Diebert, CPA, Tax Manager
ASL Tax Group

The U.S. Supreme court recently made a landmark decision in South Dakota v. Wayfair. The case has changed the rules on the taxability of internet sales. The court decided for South Dakota and allowed the state’s ability to tax internet sales of consumers who lack physical presence in South Dakota. Since 1992, the Supreme Court decision in Quill Corp v. North Dakota has been the standard on when states can impose sales tax on retailers. The Quill decision required some minimum physical presence of property or employees before states could impose sales tax. As technology has advanced and consumers have turned to the internet for retail activities, the Quill standard has imposed a barrier on the individual states’ ability to tax sales activities occurring within their borders. Many states have reacted by imposing new standards in an effort to circumvent the Quill decision. Some of these standards include cookie nexus or click through nexus that put simply, create the minimum presence needed to impose sales tax through defining the presence of technology as physical presence of property.  Up until now the Supreme Court has declined to hear a case involving the state’s new imposition of these nexus standards that do not follow the Quill decision, until now. (more…)