Until the U.S. Supreme Court’s June 2018 decision in South Dakota v. Wayfair, states could not require out-of-state sellers to collect and remit sales or use tax unless the seller had a physical presence in that state. The Wayfair court examined a South Dakota statute that did not require physical presence to establish sales tax nexus and overruled its previous decision in Quill Corp. v. North Dakota that required in-state physical presence for states to require out-of-state vendors to collect and remit sales or use tax. The question remained, however, whether states could retroactively tax out-of-state sellers under these regulations for the time between the regulations’ implementation and the Wayfair decision.

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