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This Comment aims to act as a guiding source for potential issues that will arise from South Dakota v. Wayfair, which was decided in June 2018. The Wayfair decision changed the long-held requirement that states can only collect sales taxes from sellers that have a physical presence within the state.  Under Complete Auto Transit, Inc. v. Brady, the Supreme Court put forth a test that states must meet if they wish to collect a sales tax from sellers. One of the prongs of this test allows a state to collect a sales tax from a seller if the seller has created a substantial nexus within the state. Under Quill Corp. v. North Dakota, a substantial nexus was defined as a physical presence. This physical presence requirement meant out-of-state sellers, such as online retailers, were not required to pay a sales tax to states where they sold their products, since these sellers did not have a physical presence within the state.  For years, states attempted to circumvent the physical presence requirement under Quill but were unable to do so successfully. In June 2018, the Supreme Court in South Dakota v. Wayfair held that a seller does not need a physical presence within a state in order for a state to require the seller to pay a sales tax. The Court considered three factors: South Dakota's substantial nexus requirement, which stated an out-of-state seller creates a nexus with South Dakota if they have made at least $100,000 in sales or 200 transactions with consumers in South Dakota; South Dakota is part of the Streamlined Sales and Use Tax Agreement (SSUTA), which streamlines the process of sales tax collection; and the Court's decision would not apply retroactively to past transactions.  The Court's opinion applied specifically to the laws in place in South Dakota. Since the opinion in Wayfair was specific to South Dakota, states started enacting their own legislation similar to South Dakota's so that they can start charging a sales tax on out-of-state sellers as well.  Congress can remain silent on the issue in order to allow the states to continue to act as they deem fit. Alternatively, since each state has set its own requirements, Congress can step in and set a uniform system of requirements for states to meet in order to collect sales taxes. Congress has the constitutional authority to act under the Commerce Clause to create a uniform system of taxation. A uniform system will provide states and sellers with guidance on how to proceed in light of the Wayfair decision.  This Comment argues that Congress should enact a statute to create a uniform system of taxation. The uniform system will include a definition of what constitutes a good (products purchased from online retailers) and what constitutes a service (online streaming services). Additionally, the uniform system will create a minimum substantial nexus requirement, preferably by adopting the requirement that South Dakota has in place. The uniform system will also require states who wish to collect a sales tax from online sales to be members of the Streamlined Sales and Use Tax Agreement (SSUTA). Lastly, the uniform system will forbid states from applying the Wayfair decision retroactively.

Taxation in the Cyber Age: The Future of Wayfair