United States

Insights on the U.S. Supreme Court’s "South Dakota v. Wayfair Inc." Decision

Impacts and next steps for sellers

The Effects of Wayfair

On June 21, 2018, the U.S. Supreme Court ruled in favor of the state in South Dakota v. Wayfair, a case in which South Dakota sought to have a statute imposing economic nexus standards on remote sellers upheld by the Court. In its decision, the Court concluded that the physical presence standard that had existed for decades for sales and use tax nexus was “unsound and incorrect.” The Court overruled its prior decisions in National Bellas Hess and Quill, thus opening the door for states to require remote sellers to collect and remit sales and use taxes.

Now that Quill has been overturned, what is next for sellers? The Court did not ultimately opine on the constitutionality of South Dakota’s law, but remanded the case for the state court to determine whether there were any other Commerce Clause concerns with South Dakota’s economic nexus law. However, the Court noted that the law contained several provisions that appeared to ensure that the law would pass constitutional muster and would not create undue burdens on sellers.

And while the litigation is not yet over in South Dakota, over a dozen states have already acted and have laws or regulations on their books similar to South Dakota’s law. The effective dates of these provisions vary by state. Certain states are currently prohibited from enforcing their economic nexus laws or have provisions stating that that the laws can be enforced prospectively only. As these provisions become effective and enforceable, which many will in the weeks and months to come, sellers will need to respond accordingly.

Checklist of next steps:

Step 1 – Review nexus footprint

Step 2 – Consider the overall business implications

Step 3 – Make taxability determinations

Step 4 – Review and consider technology needs

Step 5 – Filing compliance and initial registration

Step 6 – Audit support and ongoing compliance efforts


Navigating a world without Quill

in the wake of the U.S. Supreme Court's landmark decision in South Dakota v. Wayfair, companies will need to act quickly to avoid unnecessary exposure. Companies will now need to determine when and how they must come into compliance with existing economic nexus standards.

Discover more about the decision and download our implementation summary checklist here.


Insights from KPMG

Watch, listen, and read about the latest news from KPMG professionals regarding the Wayfair decision 



Webcast Replay: The Wait for Wayfair is Over – What's Next?

Watch a replay of our June 26 TaxWatch Webcast, where professionals from KPMG’s State and Local Tax Practice discuss the Wayfair holding and the implications for businesses, both domestic and foreign. The Webcast also covers recent state legislative activity with regards to sales and use tax nexus and how those changes apply in this new world.

View the Wecbast replay here.


TaxNewsFlash Alerts

Summaries of the latest developments pertaining to effects of the Wayfair decision.



This Week in State Tax (TWIST) Podcasts

State and Local Tax professional Sarah McGahan, from KPMG's Washington National Tax practice, covers the topics listed below:

August 13, 2018 - Multistate: States continue to respond to the Wayfair decision - guidance issued from South Dakota, Maryland, Mississippi, Arkansas, North Caroline, Wyoming, Maine, California, and Lousiana.

August 6, 2018 - Multistate: States continue to respond to the Wayfair decision - guidance issued from South Dakota, Kentucky, Nebraska, Michigan, and Washington.

July 30, 2018 – Multistate: Additional state responses to the Wayfair decision – guidance and statements issued from Indiana, Minnesota, Nevada, Rhode Island, Utah, and New Hampshire

July 23, 2018 – Multistate: More state reactions to the Wayfair decision – guidance and statements issued from Maryland, Minnesota, New Hampshire, and Utah

July 16, 2018 – Multistate: more state reactions to the Wayfair decision – guidance and statements from Hawaii, Indiana, Louisiana, Montana, New Hampshire, Rhode Island, South Carolina, Texas, and Wyoming

July 9, 2018 – Multistate: states continue to issue guidance on the Wayfair decision – guidance and statements from Ohio, Utah, Wisconsin, New Hampshire, and Alabama

July 2, 2018 – Rhode Island: sellers reminded of collect or report requirement post-Wayfair

July 2, 2018 – Multistate: additional state guidance on South Dakota v. Wayfair, Inc. – guidance and statements from Iowa, Massachusetts, Mississippi, Vermont, Texas, and Hawaii.

 June 25, 2018 – Multistate: several states issue post-Wayfair guidance – guidance and press releases from North Dakota, Minnesota, Louisiana, and New Jersey.

Six Steps Remote Sellers Can Take to Prepare for the Wayfair Decision

In this CFO magazine article, Kent Johnson and Harley Duncan outline how the U.S. Supreme Court's reversal of Quill may impact remote sellers, particularly those selling into the U.S. from foreign countries.

Read the article here.


For more information, please contact



Kent Johnson

Partner in Charge, Indirect Tax


E: kjohnson@kpmg.com


Harley Duncan

Managing Director, State and Local Tax


E: hduncan@kpmg.com