Document ID: ./input/supremecourt_opinions/opinions/17pdf/17-494_j4el.pdf
Page Number: 24

Cite as:  585 U. S. ____ (2018) 

19 

Opinion of the Court 

sales  alone  were  estimated  at  $453.5  billion.    Dept.  of
Commerce,  U. S.  Census  Bureau  News,  Quarterly  Retail
E-Commerce  Sales:  4th  Quarter  2017  (CB18–21,  Feb.  16, 
2018).  Combined with traditional remote sellers, the total 
exceeds  half  a  trillion  dollars.  Sales  Taxes  Report,  at  9. 
Since the Department of Commerce first began tracking e-
commerce  sales,  those  sales  have  increased  tenfold  from 
0.8 percent to 8.9 percent of total retail sales in the United
States.  Compare  Dept.  of  Commerce,  U. S.  Census  Bu­
reau,  Retail  E-Commerce  Sales  in  Fourth  Quarter  2000 
(CB01–28,  Feb.  16,  2001),  https://www.census.gov/mrts/
www/data/pdf/00Q4.pdf,  with  U. S.  Census  Bureau  News,
Quarterly  Retail  E-Commerce  Sales:  4th  Quarter  2017.
And  it  is  likely  that  this  percentage  will  increase.    Last 
year, e-commerce grew at four times the rate of traditional 
retail, and it shows no sign of any slower pace.  See ibid. 

This expansion has also increased the revenue shortfall 
faced by States seeking to collect their sales and use taxes.
In  1992,  it  was  estimated  that  the  States  were  losing 
between  $694  million  and  $3  billion  per  year  in  sales  tax 
revenues  as  a  result  of  the  physical  presence  rule.    Brief 
for  Law  Professors  et al.  as  Amici  Curiae  11,  n. 7.    Now 
estimates  range  from  $8  to  $33  billion.    Sales  Taxes  Re­
port,  at  11–12;  Brief  for  Petitioner  34–35.  The  South 
Dakota Legislature has declared an emergency, S. B. 106, 
§9,  which  again  demonstrates  urgency  of  overturning  the 
physical presence rule.

The  argument,  moreover,  that  the  physical  presence
rule  is  clear  and  easy  to  apply  is  unsound.    Attempts  to
apply the physical presence rule to online retail sales are 
proving  unworkable.  States  are  already  confronting  the 
complexities  of  defining  physical  presence  in  the  Cyber 
Age.  For  example,  Massachusetts  proposed  a  regulation
that  would  have  defined  physical  presence  to  include
making  apps  available  to  be  downloaded  by  in-state  resi­
dents  and  placing  cookies  on  in-state  residents’  web