Question

South Dakota v. Wayfair has been called the "tax case of the millennium." Explain why this SCOTUS decision is so important for nexus purposes.

Answer 1

In recent case decided by supreme court of US it was held that states can collect sales tax from online retailers even if they don't have physical location in that state, even they never visited there they have to pay tax as online market is increasing its share day to day. Supreme court judgement is correct and very important as today time and manner changed of doing business and the manner people buy from market. This overrulled the previous judgement in Quill v. north dakota that states that sales tax can be charged only if the seller has physical presence in that state whether shop or wharehouse, but now sales tax can be calculated even if seller don't have physical location in that state but makes a sale.

SCOTUS decision is important:

1.)Check on avoidance of tax by local retailers:

As now the nexus will be created because of supreme court judgement and online retailer have to pay sales tax even if no physical location in that state, nexus has been created and online retailers come in bracket of tax.

2.) Increase in revenue of government:

Nexus created by judgement is very important for the increase in revenue of government and fair tax payment so that economy of US will improve as govt. spending for growth measures will increase.

3.)Compliance for online retailer:

As now online retailers need to pay tax, US has more that 10k jursidiction and every state has different exemptions and compliace requirements which will be very complex for online retailers to comply with.

4.) For growth, education, health care etc. :

Now online retailers will not be able to avoid tax and it will increase the revenue of US government and increase in healthcare facilities and better education will inturn leads to growth and high standard of living.