The law established a minimum standard for economic nexus (200 or more transactions or more than $100,000 in gross revenue from South Dakota). In striking down the economic nexus standard, the court specifically stated that it was bound to follow the United States Supreme Court's decision in Quill Corp. v. North Dakota, 504 U.S. 298 (1992) because that case was directly controlling. Interestingly, the State admitted that the court was required to grant summary judgment in favor of the retailers because of Quill. While the State's position is unusual, it furthers the State's goal to get the United States Supreme Court to reconsider Quill and, more significantly, to dispatch with the physical presence requirement for sales tax collection purposes. Further, because the State does not have an intermediary appellate court, the Wayfair decion is appealed directly to the South Dakota Supreme Court, expediting the timeline to revisit Quill.
The challenge to the South Dakota law parallels that of its neighbor, North Dakota, where the trial court struck down the state's statute requiring a retailer without a physical presence in the state to collect sales tax in a summary judgment decision. State v. Quill Corp., 470 N.W.2d 203 (N.D. 1991), rev'd by 504 U.S. 298 (1992). Whether Wayfair is taken up by the U.S. Supreme Court remains to be seen, but states and taxpayers alike are looking for guidance on the future of the physical presence requirement under Quill. Indeed, a number of states have adopted regulations or policy positions similar to South Dakota; few, however, have gone as far as South Dakota in enacting a statute on remote sales tax collection.