In an eagerly-awaited decision, the United States Supreme Court struck down today the “physical presence” standard in Quill Corp. v. North Dakota, 504 U.S. 298 (1992). Quill had long hamstrung states’ efforts to collect sales and use taxes on purchases by in-state residents of products sold by internet-only retailers. With Quill now history, states are free to impose sales and use tax collection responsibilities on out-of-state retailers who sell predominantly through the internet.
The decision is a major victory for state and local governments, who have argued for years that the growth of the internet marketplace since Quill was decided has cost them billions of dollars in unpaid sales and uses taxes.
Our colleagues in the State and Local Tax practice group discuss the Court’s decision at length in their blog, Adding Value (which you should subscribe to!). You can read their analysis here.