SALT Report 3840 – A new South Dakota law went into effect this week requiring certain out-of-state online retailers to collect South Dakota sales tax on products sold to customers located in South Dakota.
The South Dakota law was passed with the express intent that serve as a test case to challenge the Supreme Court 1992 decision in Quill v. North Dakota where the majority ruled that it is a violation of the Commerce Clause for a state to require a company to collect that state’s sales tax unless the company has a physical presence in the state. In the ruling, the Court reiterated that the U.S. Congress has the sole power to regulate interstate commerce. Thus, Congress could have addressed this issue by now, however, in the nearly 25-years since the Quill decision, Congress has failed to reach an agreement on such a law.”
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