What 2018 US Supreme Court case overruled the Quill sales tax nexus standard for online retailers?

What 2018 US Supreme Court case overruled the Quill sales tax nexus standard for online retailers? The answer is South Dakota v. Wayfair.

Quill Corp. v. North Dakota, decided in 1992, had treated physical presence as the constitutional minimum for requiring an out-of-state mail-order seller to collect sales tax. The rule became increasingly controversial as internet commerce expanded, because a large online retailer could make extensive sales into a state without maintaining stores, offices, or warehouses there.

On June 21, 2018, the Supreme Court ruled 5–4 that Quill’s bright-line physical-presence rule was unsound and overruled it. The case involved South Dakota’s law requiring certain remote sellers to collect tax after exceeding either $100,000 in annual sales or 200 transactions in the state. The Court emphasized economic activity and rejected the idea that substantial modern commerce must be physically located in the state.

Wayfair did not create one nationwide sales-tax rate or automatically require every small seller to collect tax. States still must comply with constitutional limits and their own statutes. Its practical effect was to let states adopt economic-nexus rules for many remote sellers, leading to a major change in online retail tax compliance.