South Dakota v. Wayfair, Inc. [SCOTUSbrief] - YouTube

The parties in this case are the state of South Dakota, and the respondents are several

online retailers, including Wayfair, who's the named respondent.

It basically started a couple years ago when Justice Kennedy effectively invited a reconsideration

of, of a precedent in a case called Quill.

The state of, uh, South Dakota decided to pass legislation knowing that it was not consistent

with Quill for the express purpose of having the law be challenged and teeing up the issues.

What's at issue here is the state sales tax.

So, I think most of us are probably used to when we make a purchase of seeing that line,

and some of it will be percentage of the sale that'll go to the state, sometimes it's a

percentage of a sale that'll go to a municipality.

South Dakota doesn't have an income tax, uh, so it does rely on, on sales and, and use

taxes.

The precedent in Quill basically imposes what's been known as a physical presence requirement

that has to do with when the state can impose a sales tax. So, for example, if a company is

doing business, is selling to folks in South Dakota, but it doesn't have a presence in

South Dakota, then a sales tax is not owed.

The constitutional doctrine in this case, it's focused on interstate commerce and the

extent to which taxing businesses or companies that don't have a physical presence in a state

acts as a burden on interstate commerce.

One state in regulating the issues that concern it should not be able to essentially burden

interstate commerce.

The best argument for Wayfair may be the force of stare decisis.

Stare decisis is the principle, it basically boils down to the thing is decided, and it's

the principle that would say when we look at overruling a precedent, we look not only

as to whether it was right or wrong, but we also look at whether there are such things

as reliance interests.

In other words, have people developed interest in reliance on that precedent, such that those

interests are strong enough that they should be overruled. And the force of stare decisis

is itself an issue that is very hotly debated.

There are some on the court that would say if it's wrong, it's wrong and we should not

hesitate to right a constitutional decision that's wrong.

Others on the court are much more likely to defer to the kind of considerations that are

implicated in terms of reliance interests in stare decisis.

Wayfair would probably focus on the complexity of all of the different taxing jurisdictions

and would say that having to deal with that patchwork quilt of all of those taxing jurisdictions

do constitute an undue burden on interstate commerce.

South Dakota's best argument is that these, uh, state sales or use taxes, even without

a physical requirement, would not impose an undue burden on interstate commerce.

There have been a lot of developments in terms of software, etc., that make going through

the exercise of determining what taxes is due a lot easier.

The huge change that's gone is the growth of online commerce.

If you think in terms of today, the options that are available to consumers in terms of

going into a brick and mortar store, or ordering online from an online company, or increasingly

ordering online from a company that also is a brick and mortar store.

The time has come to, to revisit and to overrule Quill.

Under the current Supreme Court case law, just about everything and anything these days

is interstate commerce, so it casts a very, very broad reach and this has been traditionally

a very, would say, hotly litigated, uh, area, um, particularly as we think about federalism

and where to strike the balance between things that truly are national in character, and

thus are permissibly regulated by, by Congress and the federal government, and those things

that are properly left to the states.