In an article published recently in Lexpert, Davies partner Peter Glicklich speaks about the implications of the Supreme Court of the United States’ decision in South Dakota v Wayfair Inc., which held that states can require online retailers to collect sales taxes even if the seller does not have a physical presence in the state.

“Wayfair is the court’s most significant state tax decision in at least 30 years,” Peter says.

“The Wayfair decision seems to have held that South Dakota’s model of remote nexus, at least, is in fact constitutional,” he explains. “The court even hinted at a new test for substantial nexus based on ‘substantial virtual connections,’ which would be a type of physical presence established via customers’ computers through, for example, cookies left on customers’ hard drives or apps downloaded onto customers’ phones,” he adds.

Ultimately, Peter maintains, Congress will have to act. “Someone’s going to have to do something to smooth this out and establish minimums so that we can have the type of coherence and consistency that will make it easier to comply with these laws,” he says.