Quill Corp. v. North Dakota
Quill Corp. v North Dakota is the US Supreme Court decision of May 26, 1992 that barred states from requiring out-of-state sellers without a physical presence to collect sales tax, until Wayfair overruled it in 2018.
What it requires
Under Quill, the Commerce Clause allowed a state to require use tax collection only from sellers with physical presence, such as offices, employees or inventory, in that state; catalog and later online sellers shipping from outside were exempt, and buyers owed use tax themselves. The Court rejected the Due Process objection. South Dakota v. Wayfair overruled the physical presence test on June 21, 2018, so Quill imposes no current limit.
Why it matters
Quill explains why early e-commerce grew with a tax advantage over local stores and why physical presence still matters. Amazon long limited where it placed warehouses to avoid collection duties, a strategy that ended as it expanded fulfillment centers nationwide. Today, inventory stored with a 3PL still creates nexus, so Quill's physical presence concept survives as one of two ways, along with economic nexus, that a seller becomes obligated to collect sales tax.
Events
Related laws
Sources
- Quill Corp. v. North Dakota, 504 U.S. 298 (Justia) supreme.justia.com
Not legal advice.