South Dakota v. Wayfair

The 5 to 4 ruling upheld South Dakota's law requiring remote sellers with more than $100,000 in sales or 200 transactions a year to collect tax. Every state with a statewide sales tax now has an economic nexus threshold, typically $100,000 in sales, and many, including Illinois from January 1, 2026, have dropped the transaction count. Sellers over a threshold must register, collect, file and remit, while marketplace sales are generally collected by the marketplace.

Wayfair made sales tax compliance a standard cost of selling online in the US, and it interacts directly with fulfillment choices. Inventory stored in a 3PL warehouse creates physical nexus in that state regardless of sales volume, so splitting stock between warehouses in, for example, Pennsylvania and Georgia can create registration duties in both. Brands should map warehouse locations and sales by state, use tax software, and confirm which channels already collect through marketplace rules.

• Distributed InventoryStock split across several warehouses
• Fulfillment by AmazonFBAAmazon stores and ships your orders
• Multi-Channel FulfillmentMCFOne inventory pool for every sales channel

• Quill Corp. v. North Dakota1992, overruled 2018 · 1992 case requiring physical presence for sales tax
• Marketplace Facilitator Law2018, in all sales tax states by 2023 · State laws making marketplaces collect sales tax

1. South Dakota v. Wayfair, Inc., opinion (Supreme Court) supremecourt.gov
2. Avalara: States eliminating economic nexus transaction thresholds avalara.com