504 U.S. 298 (1992)
Quill Corp. v.
Does the imposition of a use tax collection duty on a business with no physical presence in the taxing state violate the Commerce Clause of the United States Constitution?
For a state to require an out-of-state seller to collect and remit sales tax, the seller must have a 'substantial nexus' with the taxing state under the Commerce Clause of the United States Constitution.
The Supreme Court held that a business must have a physical presence in a state for the state to require it to collect sales tax, affirming the need for a substantial nexus as articulated under the Commerce Clause.
Quill was pivotal in validating the continuing relevance of the physical presence rule, which governed state tax powers until it was eventually overruled by South Dakota v. Wayfair, Inc. in 2018. It marked an era where traditional commerce principles were tested against the tides of modern economic practices, guiding states on how they could approach tax policy with respect to remote sellers. Law students should study this case to understand the themes of federalism and economic policy at play and recognize how legal standards evolve in response to changes in commerce and technology.