A recent U.S. Supreme Court decision that has been hailed as a victory for tax collectors could also be a blow to small businesses. If you conduct online sales to out-of-state customers, you need to start paying close attention to laws regarding sales/use taxes (SUT) in every state where you do business.The backstory to the landmark case, South Dakota v. Wayfair , stretches back decades. In 1967 the Supreme Court ruled that mail-order companies had no SUT obligation on out-of-state transactions. In 1992 the Quill Court decision upheld the physical presence standard for SUT nexus.
Before the Wayfair decision, the same laws governing mail-order sales also applied to sales made through the internet. In other words, if you ran a business in California that made online sales to New York residents, you weren't obligated to collect New York sales tax because you didn't have a physical presence (or "nexus") in that state.