State v. Wayfair Inc.

Citation Codes

Equivalent Citations

citation codes

Docket Number

#28160

Attorney(S)

MARTY J. JACKLEY, Attorney General, RICHARD M. WILLIAMS, Deputy Attorney General, KIRSTEN E. JASPER, Assistant Attorney General, Pierre, South Dakota, ERIC F. CITRON of Goldstein & Russell, PC, Bethesda, Maryland, Attorneys for plaintiff and appellant. GEORGE S. ISAACSON, MARTIN I. EISENSTEIN, MATTHEW P. SCHAEFER of Brann & Isaacson, Lewiston, Maine, JEFF BRATKIEWICZ, KATHRYN J. HOSKINS of Bangs, McCullen, Butler, Foye & Simmons, LLP, Sioux Falls, South Dakota, Attorneys for defendants and appellees.

Judges

PER CURIAM.

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Smart Summary

Factual and Procedural Background

The case arises from South Dakota's statutory scheme requiring internet sellers with no physical presence in the state to collect and remit sales tax. Initially, the South Dakota Supreme Court affirmed the circuit court's summary judgment in favor of the internet sellers, holding that the statute violated the Commerce Clause. Subsequently, the United States Supreme Court vacated that judgment and remanded the case for further proceedings consistent with its opinion in South Dakota v. Wayfair, Inc. Following the mandate, the State filed a motion to remand the matter to the circuit court for proceedings consistent with the U.S. Supreme Court's decision. The internet sellers did not respond to this motion.

Legal Issues Presented

Whether South Dakota's statutory requirement for out-of-state internet sellers to collect and remit sales tax violates the Commerce Clause of the U.S. Constitution.
How to proceed on remand in light of the United States Supreme Court's decision in South Dakota v. Wayfair, Inc..

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
South Dakota v. Wayfair, Inc., 585 U.S. ___, 138 S.Ct. 2080 (2018)	Overruling prior physical presence requirement for state sales tax collection under the Commerce Clause.	Mandated remand for further proceedings consistent with the U.S. Supreme Court's ruling, effectively reversing the prior summary judgment.
Quill Corp. v. North Dakota, 504 U.S. 298 (1992)	Established physical presence rule for state sales tax collection.	Referenced as precedent overturned by the Supreme Court in Wayfair, allowing the Court of South Dakota to reconsider the Commerce Clause challenge.
National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967)	Also established physical presence requirement for sales tax collection.	Referenced alongside Quill as precedent addressed by the Supreme Court in Wayfair, permitting reconsideration of the Commerce Clause issues.

Court's Reasoning and Analysis

The South Dakota Supreme Court initially upheld the circuit court's summary judgment invalidating the state's tax collection statute under the Commerce Clause. However, the United States Supreme Court's decision in South Dakota v. Wayfair, Inc. vacated that judgment and remanded for further proceedings consistent with its new interpretation. The U.S. Supreme Court explicitly overruled the physical presence rule established in Quill and Bellas Hess, allowing states to require out-of-state sellers to collect sales tax even without physical presence. Following this, the South Dakota Supreme Court reversed the prior summary judgment and remanded the case to the circuit court to proceed in conformity with the U.S. Supreme Court's directive. The Court noted the absence of any opposition to the State's motion to remand and relied on the mandate and judgment from the U.S. Supreme Court as the basis for its decision.

Holding and Implications

Holding: The circuit court's order granting summary judgment in favor of the defendants is reversed, and the case is dispositively remanded for further proceedings consistent with the United States Supreme Court's opinion in South Dakota v. Wayfair, Inc..

Implications: This decision directly affects the parties by reopening the case for further litigation consistent with the U.S. Supreme Court's ruling, effectively allowing South Dakota to enforce its sales tax collection statute against internet sellers without physical presence. The opinion does not establish new precedent beyond implementing the Supreme Court's mandate.

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STATE OF SOUTH DAKOTA, Plaintiff and Appellant, v. WAYFAIR INC., OVERSTOCK.COM, INC., and NEWEGG INC. Defendants and Appellees.

PER CURIAM.

MARTY J. JACKLEY, Attorney General, RICHARD M. WILLIAMS, Deputy Attorney General, KIRSTEN E. JASPER, Assistant Attorney General, Pierre, South Dakota, ERIC F. CITRON of Goldstein & Russell, PC, Bethesda, Maryland, Attorneys for plaintiff and appellant.

GEORGE S. ISAACSON, MARTIN I. EISENSTEIN, MATTHEW P. SCHAEFER of Brann & Isaacson, Lewiston, Maine, JEFF BRATKIEWICZ, KATHRYN J. HOSKINS of Bangs, McCullen, Butler, Foye & Simmons, LLP, Sioux Falls, South Dakota, Attorneys for defendants and appellees.

PER CURIAM

[¶ 1.] On September 13, 2017, this Court issued its opinion in State v. Wayfair Inc. , 2017 S.D. 56, 901 N.W.2d 754. We affirmed the circuit court's summary judgment for internet sellers and held that the statutory scheme requiring these sellers with no physical presence in South Dakota to collect and remit sales tax violates the Commerce Clause.

[¶ 2.] On June 21, 2018, the United States Supreme Court vacated our judgment and remanded the case for further proceedings not inconsistent with its opinion. South Dakota v. Wayfair, Inc. , 585 U.S. ––––, 138 S.Ct. 2080, 2100, 201 L.Ed.2d 403 (2018). "Any remaining claims regarding the application of the Commerce Clause in the absence of Quill [504 U.S. 298, 112 S.Ct. 1904, 119 L.Ed. 2d 91 (1992) ] and Bellas Hess [386 U.S. 753, 87 S.Ct. 1389, 18 L.Ed. 2d 505 (1967) ] may be addressed in the first instance on remand." Id.

[¶ 3.] On July 23, 2018, this Court received and filed certified copies of the United States Supreme Court's mandate and judgment in Wayfair . Two days later, on July 25, 2018, the State filed a motion requesting that we remand the matter to the circuit court for further proceedings not inconsistent with the United States Supreme Court's opinion in Wayfair . Internet sellers filed no response to the State's motion. See SDCL 15-26A-87.2.

[¶ 4.] Accordingly, the circuit court's order granting defendants' motion for summary judgment is reversed, and the case is dispositively remanded for further proceedings not inconsistent with the United States Supreme Court's opinion in Wayfair.

[¶ 5.] GILBERTSON, Chief Justice, and ZINTER, KERN, JENSEN, and SALTER, Justices, participating.

Attachment

IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA STATE OF SOUTH DAKOTA, ORDER OF REVERSAL Plaintiff and Appellant, and DISPOSITIVE REMAND vs. WAYFAIR INC., OVERSTOCK.COM, INC. and NEWEGG INC., #28160 Defendants and Appellees.

Appellant State of South Dakota's having served and filed a motion for remand in the above-entitled matter on July 25, 2018, and no response having been filed thereto and the Court having considered said motion and having filed its decision in writing, now, therefore, for the reasons stated in #28160, State v. Wayfair Inc., 2018, S.D. 62, it is

ORDERED that the circuit court's order granting defendants' motion for summary judgment be reversed and the case is dispositively remanded for further proceedings not inconsistent with the United States Supreme Court's opinion in South Dakota v. Wayfair, Inc., 585 U.S. ___, 138 S.Ct. 2080, 2100 (2018).

DATED at Pierre, South Dakota this 9th day of August, 2018.

BY THE COURT ATTEST: David Gilbertson, Chief Justice. Clerk of the Supreme Court (SEAL) PARTICIPATING: Chief Justice David Gilbertson and Justices Steven L. Zinter, Janine M. Kern, Steven R. Jensen and Mark E. Salter.