South Dakota’s highest court, in a unanimous decision released this morning, struck down a 2016 state law requiring out-of-state retailers to collect sales taxes on transactions with state residents. The decision was entirely expected: the U.S. Supreme Court held in the 1992 case Quill v. North Dakota that under the Dormant Commerce Clause, states can collect sales taxes only from retailers with a “physical presence” in the state. South Dakota legislators knew when they passed the 2016 law that their state courts would strike it down, thus teeing up a case for the Supreme Court to reconsider its Quill precedent. The Justices will decide in a matter of months whether to take up South Dakota’s challenge.

The strongest argument for retaining the Quill precedent is just that: Quill is precedent. In fact, the 25-year-old Quill precedent was itself based on a decision 25 years earlier in National Bellas Hess, Inc. v. Department of Revenue of Illinois, in which the Court held that Illinois could not compel a mail-order merchandiser based in Missouri to collect taxes on sales across state lines. 

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