The Wayfair Decision

Supreme-Court-United-States-SCOTUSThere has been a lot of hysteria over the recent Supreme Court decision in SOUTH DAKOTA V. WAYFAIR. Let me explain the real facts. This case arose because Wayfair (an internet based company) was pushing ads to South Dakota residents containing the message ““‘[o]ne of the best things about buying through Wayfair is that we do not have to charge sales tax.’”  As you can imagine, South Dakota was not happy. They passed a law requiring that out of state vendors selling to South Dakota residents pay the sales tax. This was challenged and overturned by the State Supreme Court. The United States Supreme Court then overturned that decision and sent it back to South Dakota with very specific guidelines.

You can read the decision for yourself here – The decision begins on page 23 and is an easy read.

Amid rhetoric about “thousands of taxing jurisdictions” knocking on New Hampshire’s door, undue burdens to our businesses, etc. … it is important to understand who this affects and in what manner.

1 – Who is affected.. Establishing a nexus.

Tax liability if you do more than 200 transactions or $100,000 to the destination state.


  • I sell 3.6 million dollars online. My sales are all around $80,000 per state in 40 states. Under this decision, I am exempt.
  • I sell any amount less than $100,000 to each state and have 9,000 customers spread evenly in 50 states. I am exempt.

In other words, no small business are affected by this decision.

2 – Complying with the commerce clause

Only state wide taxes are part of this decision. Arguments about “thousands of taxing jurisdictions” literally have nothing to do with this. The decision specifically makes this point (second paragraph, age 23).

If I am liable for taxes, the taxing state must provide reporting software to me free of charge. Further, if I choose to use their use their software, I am protected from audit.


There are very limited cases where this ruling will apply. We are talking about Amazon and Walmart in scope. Further, states wishing to pursue this will have to revamp their own state laws first to be in compliance.


About Rep. Steven Smith

Steven Smith is a member of the New Hampshire House of Representatives, serving his 7th term. Rep. Smith currently represents Charlestown, Newport, and Unity. Rep. Smith is the Deputy Speaker of the NH House.
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