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Page Number: 19.0

14 

SOUTH DAKOTA v. WAYFAIR, INC. 

Opinion of the Court 

reasons. 

Consider, for example, two businesses that sell furniture
online.  The first stocks a few items of inventory in a small
warehouse  in  North  Sioux  City,  South  Dakota.    The  sec­
ond  uses  a  major  warehouse  just  across  the  border  in
South Sioux City, Nebraska, and maintains a sophisticated 
website with a virtual showroom accessible in every State, 
including  South  Dakota.    By  reason  of  its  physical  pres­
ence, the first business must collect and remit a tax on all 
of  its  sales  to  customers  from  South  Dakota,  even  those 
sales  that  have  nothing  to  do  with  the  warehouse.   See 
National  Geographic,  430  U. S.,  at  561;  Scripto,  Inc.,  362 
U. S., at 211–212.  But, under Quill, the second, hypothet­
ical seller cannot be subject to the same tax for the sales of 
the  same  items  made  through  a  pervasive  Internet  pres­
ence.  This distinction simply makes no sense.  So long as
a state law avoids “any effect forbidden by the Commerce 
Clause,”  Complete  Auto,  430  U. S.,  at  285,  courts  should 
not rely on anachronistic formalisms to invalidate it.  The 
basic principles of the Court’s Commerce Clause jurispru­
dence  are  grounded  in  functional,  marketplace  dynamics;
and  States  can  and  should  consider  those  realities  in 
enacting and enforcing their tax laws. 

B 
The  Quill  Court  itself  acknowledged  that  the  physical
presence rule is “artificial at its edges.” 504 U. S., at 315.
That was an understatement when Quill was decided; and 
when the day-to-day functions of  marketing  and distribu­
tion  in  the  modern  economy  are  considered,  it  is  all  the 
more evident that the physical presence rule is artificial in 
its entirety.

Modern  e-commerce  does  not  align  analytically  with  a
test that relies on the sort of physical presence defined in 
Quill. 
In  a  footnote,  Quill  rejected  the  argument  that
“title  to  ‘a  few  floppy  diskettes’  present  in  a  State”  was