By the Kean Miller State and Local Tax Team
On June 21, 2018, the Supreme Court of the United States issued its opinion in South Dakota v. Wayfair, Inc., Dkt. No, 17-494, 585 U.S. __ (June 21, 2018). In addition to overturning the physical presence substantial nexus standard applicable to use tax collection requirements articulated by the court in Quill and Bellas Hess, the Court’s far reaching opinion in Wayfair creates an undefined sufficiency test for determining when a taxpayer has substantial nexus with a state for purposes of the dormant Commerce Clause. The new test appears to apply to all state tax regimes, including income, franchise, sales and use and property taxes, and may have substantial and significant implications for taxpayers. And the Court’s decision may signal that the Court intends to provide significantly more deference to state tax regime in the future.
In conjunction with this article, the Kean Miller tax group is also releasing a detailed article explaining the Louisiana specific implications of Wayfair. That article may be found here.
Background and Procedural History
The issue in Wayfair was whether South Dakota could impose a use tax collection obligation on an out-of-state company with no in-state physical presence when that company engaged in taxable transactions of goods or services to be delivered into South Dakota. South Dakota and many other states and localities impose a sales tax on sales of tangible personal property and taxable services that occur in that state. The sales tax is imposed on the purchaser but collected by the seller, as an agent of the state, who then remits the tax to the state.
To prevent a taxpayer from thwarting the sales tax by purchasing a good outside the state for use in the state, South Dakota and many other states impose a complimentary use tax on the purchaser’s use of the property in the state. The use tax is imposed on the purchaser of the good or service but, historically, states have struggled to enforce the tax against individual purchasers. Because of the difficulties in enforcing state use tax laws against their own citizens, states have enacted a variety of laws to impose a use tax collection obligation on sellers of taxable goods or services. Remote vendors with no in-state physical presence have challenged state attempts to impose use tax collection obligations on them. The law applicable before today, the Supreme Court’s decisions in Bellas Hess (1967) and later in Quill (1992), held that a state may not impose a use tax collection obligation on an out-of-state taxpayer unless that taxpayer has more than a de minimis physical presence in the state.
In 1977, in between its decisions in Quill and Bellas Hess, in Complete Auto, the Court created a four prong test to determine whether a state tax on interstate activity satisfied the dormant Commerce Clause. According to the Court, to withstand dormant Commerce Clause scrutiny, a state tax must applied to an activity with a substantial nexus with the taxing state, be fairly apportioned, not discriminate against interstate commerce, and be fairly related to the services provided by the state.
With one exception, the Court has never articulated a standard for what type of contacts satisfy the substantial nexus prong of the dormant Commerce Clause test. In Quill, the Court explored the substantial nexus requirement of the dormant Commerce Clause and concluded that the substantial nexus standard was different than the minimum contacts standard for the Fourteenth Amendment Due Process Clause and held that for use tax collection purposes, substantial nexus required an in-state physical presence. Because the Court never articulated a substantial nexus standard, with the exception of the narrow standard in Quill, states have adopted increasingly aggressive nexus standards for non-sales and use taxes, such as economic presence and factor presence standards for state income taxes, and other nexus theories, for sales and use taxes and other taxes, such as affiliate nexus and clink-through nexus standards.
Since Quill was decided, in 1992, the substantial increase in electronic commerce has changed how goods and services are provided. And states have been increasingly concerned about revenue they perceive to be lost because of their inability to enforce their use tax against purchasers. In addition, merchants with an in-state physical presence have been concerned about their ability to complete with on-line sellers with no in-state physical presence, that were not required to collect use tax on sales to in-state customers.
In 2016, South Dakota enacted a law that directly contradicted the Court’s decision in Quill for the purpose of forcing the court to revisit the physical presence in Quill and Bellas Hess. South Dakota’s law required an out-of-state seller to collect and remit use tax as if the seller had an in-state physical presence if the seller, on an annual basis, either delivered more than $100,000 of goods or services into the state or engaged in 200 or more transactions for the delivery of goods or services into the state. South Dakota’s law was tailored to foreclose the possibility of retroactive application and to provide a means for the law to be stayed until its constitutionality was established.
Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc. (collectively, “remote sellers”) are large on-line retailers with no physical presence in South Dakota that satisfied the minimum sales or transactions requirements of the law refused to collect the tax and South Dakota filed a declaratory judgment action against them in state court. The remote sellers moved for a summary judgment, arguing the law was unconstitutional. The trial court agreed with the remote sellers and granted a summary judgment in its favor. The South Dakota Supreme Court affirmed.
South Dakota petitioned the US Supreme Court for certiorari. The Court granted certiorari to reconsider the scope and validity of the physical presence rules mandated by Quill and Bellas Hess.
The Court’s Rejection of the Physical Presence Rule in Quill
Justice Kennedy delivered the opinion of the court; writing for a majority that included Justices Thomas, Ginsburg, Alito, and Gorsuch. Chief Justice Roberts filed a dissenting opinion in which Justices Breyer, Sotomayor, and Kagan joined.
The majority began by explaining the history of the Court’s dormant Commence Clause jurisprudence. And they concluded that modern dormant Commerce Clause precedents rest on two primary principles that mark the boundaries of a state authority to regulate interstate commerce. “First, state regulations may not discriminate against interstate commerce; and second, States may not impose undue burdens on interstate commerce.” A state law that discriminates against interstate commerce is per se invalid, but a state law that burden’s interstate commerce will be upheld unless the burden is clearly excessive in relation to the putative local benefits. According to the majority, these two principle guides the courts in all cases challenging state law under the Commerce Clause, including the validity of state taxes.
After articulating the guiding principles of the Courts analysis, the majority then explained the history of the Court’s state tax dormant Commerce Clause jurisprudence in Bellas Hess, Complete Auto, and Quill, and noted that three justices based their decision to uphold the physical presence standard for use tax collection obligations in Quill on stare decisis alone. The majority then noted that economic changes that have occurred since Quill and stated that the physical presence rule, both as first formulated and as applied today, was an incorrect interpretation of the Commerce Clause. The majority then proceeded to explain why the physical presence rule was incorrect.
The majority began by explaining that Quill is flawed on its own terms because (1) the physical presence rule was not a necessary interpretation of the substantial nexus requirement; (2) the rule creates rather than resolves market distortions; and (3) the rule imposes an arbitrary, formalistic distinction that modern Commerce Clause precedents disavow.
With respect to his first point, the majority explained that the question in Wayfair is whether a state may require a remote seller to collect and remit use tax and not whether the state has jurisdiction to tax the underlying sale of the good or service. According to the majority, the substantial nexus requirement is closely related to the due process minimum contacts requirement and that it is well settled that a business need not have a physical presence to satisfy the due process requirement. Thus, even though the due process or Commerce Clause standards may not be identical or coterminous, when considering whether a state may levy a tax there are significant parallels between the two standards. Therefore, according to the majority, the reasons given in Quill for rejecting the physical presence rule for due process purposes apply as well to the question of whether physical presence is required to force an out-of-state seller to remit collect and remit use taxes. As a result, physical presence is not necessary to create substantial nexus.
The majority also rejected the idea that without the physical presence rule the administrative costs of complying with thousands of sales tax jurisdictions’ tax laws created an undue burden on interstate commerce. The majority rationalized this conclusion by noting that with the physical presence standard it was still possible that a small company with a diverse physical presence might face equal or higher burdens than a large remote seller. Thus, according to the majority, the physical presence rule was a “poor proxy for the compliance costs faced by companies that do business in multiple states.”
The majority then explained that the physical presence rule creates rather than resolves market distortions. And that the distortions created by the rule were in direct conflict with the purpose of the Commerce Clause, to prevent states from engaging in economic discrimination. According to the majority, local business and businesses with a physical presence are at an economic disadvantage because a remote seller can offer “de facto lower prices” since states have difficulty enforcing their use tax laws directly against purchasers. Thus, Quill served as a “judicially created tax shelter” and guarantees a competitive benefit to certain businesses based solely on the organizational form they choose. Moreover, according to the majority, the physical presence rule caused harm to local markets and may have resulted in those markets lacking storefronts, distribution points, or employment centers. According to the majority, rejecting the rule was necessary to ensure that the Court’s precedents did not create “artificial competitive advantages.” And the Court “should not prevent States from collecting lawful taxes” through a physical presence rule.
With respect to formalism, the majority noted that the Court’s Commerce Clause jurisprudence has “eschewed formalism” in favor of a fact sensitive case-by-case analysis but Quill treats “economically identical actors” differently for “arbitrary reasons.” The majority justified this conclusion by explaining that the physical presence rule would tax an online sale by an in-state retailer differently than the sale of the same item to the same customer by an out-of-state retailer, solely because of the location of each firm’s warehouse and even if neither sale was related to the business’s warehouse. According to the majority, a state is free to consider functional marketplace realities in enacting and enforcing its laws and courts should not rely on rely on “anachronistic formalisms” to invalidate those laws under the Commerce Clause if the law avoids an effect forbidden by the Commerce Clause.
The majority next addressed the role of the physical presence requirement in the modern e-commerce economy and concluded that the rule was arbitrary in its entirely. According to the majority, it is not clear why a single employee or a single warehouse should create substantial nexus while “physical” aspects of pervasive modern technology, including a “cookie” saved on a customer’s hard drive, a mobile app downloaded on a customer’s phone, or data storage leased in a state, should not. In addition, according to the Court, “between targeted advertising and instant access to most consumers via any internet-enabled device” a business may have a meaningful in-state presence without having an in-state physical presence. “[T]he continuous and pervasive virtual presence of retailers today is, under Quill, simply irrelevant and the “Court should not maintain a rule that ignores these substantial virtual connections to the State.”
The majority next explained that the physical presence rule was an “extraordinary imposition by the Judiciary on States’ authority to collect taxes and perform critical public functions.” According to the majority, the rule intruded on states’ reasonable choices in enacting their tax systems and allowed remote sellers to escape an obligation to remit a lawful tax. And the rule was unjust because it “allows [a remote seller’s] customers to escape payment of sales taxes—taxes that are essential to create and secure the active market they supply with goods and services.” According to the majority, “there is nothing unfair about requiring companies that avail themselves of the States’ benefits to bear an equal share of the burden of tax collection.” And helping a remote seller’s customer “evade a lawful tax” unfairly shifts an increased share of taxes to customers that buy from a business with an in-state physical presence. According to the majority, the Court should avoid undermining public confidence in a state’s tax system by creating inequitable exceptions. Further, the Court suggested that Quill harms both federalism and free markets by limiting a state’s ability to seek long-term prosperity and preventing market participants from competing on an even playing field.
Before issuing its holding in Wayfair, the majority also rejected upholding Quill based on stare decisis because, according to the majority, a Commerce Clause decision may not “prohibit the States from exercising their lawful sovereign powers in our federal system.” The majority also noted that it was inappropriate to ask Congress to resolve the matter because, while Congress could change the physical presence rule, it was not proper for the Court to ask Congress to address a false constitutional premise of the Court’s own creation. The majority also dismissed the theory that the physical presence rule was easy to apply by noting Massachusetts and Ohio’s recent attempt to expand the physical presence rule to placing cookies on an in-state residents computer and similar technical and arbitrary rules that would likely result in a substantial amount of litigation. And, because Quill was not easily applied, the majority noted that augments for reliance based on the physical presence rule’s clarity were misplaced. Finally, the majority noted that Congress could resolve any problems associated with the administrative burden rejecting Quill imposed on small businesses and that other aspects of the Commerce Clause can protect against any undue burden on interstate commerce that may be placed on small business or others that engage in interstate commerce.
For the reasons articulated above, the majority then concluded that the physical presence rule of Quill was “unsound and incorrect” and that Quill and Bellas Hess are now overruled.
The New Substantial Nexus Standard
The majority in Wayfair was not content to merely overrule Quill and Bellas Hess. After doing so, the majority articulated a new test to determine whether substantial nexus exists and, in so doing, changed the entire landscape of state of local taxation in the US.
According to the majority, for purposes of the substantial nexus prong of Complete Auto, “[S]uch a nexus is established when the taxpayer [or collector] ‘avails itself of the substantial privilege of carrying on business’ in that jurisdiction.” And according to the majority, this new sufficiency standard was satisfied in Wayfair “based on both the economic and virtual contacts” the remote sellers had with South Dakota. The majority continued stating “respondents are large, national companies that undoubtedly maintain an extensive virtual presence. Thus, the substantial nexus requirement of Complete Auto is satisfied in this case.”
Remand to South Dakota Supreme Court
Because the Quill physical presence rule was the only issue before the Court in Wayfair, the majority was unable to conclude that South Dakota’s law was constitutional for purposes of the Commerce Clause. As a result, the majority remanded the case to the South Dakota Supreme Court to determine whether South Dakota’s law violated some other principle of the Court’s Commerce Clause jurisprudence, e.g., whether the law discriminated against or placed an undue burden on interstate commerce.
Even though the Court remanded the case, is made a point to note that South Dakota’s law contained the following attributes:
- The law contained a safe harbor for those who transact only limited business in South Dakota;
- The law ensured that no obligation to remit the sales tax may be applied retroactively;
- South Dakota is one of more than 20 States that have adopted the Streamlined Sales and Use Tax Agreement, which standardizes taxes to reduce administrative and compliance costs by:
- Requiring single, state level tax administration;
- Requiring uniform definitions of products and services;
- Requiring simplified tax rate structures, and other uniform rules;
- Providing sellers access to sales tax administration software paid for by the State; and
- Providing sellers who choose to use that software immunity from audit liability.
The Wayfair decision represents a fundamental change in the relationship of the states to each other and the relationship of the states to the federal government. And the decision may signal a new era of state tax jurisprudence in which the courts provide a tremendous amount of deference to state tax regimes.
The “Obvious” Implication
States and localities will likely assert that the obvious implication of Wayfair is that a remote seller with economic or virtual contacts with the state is now required to collect and remit sales and use taxes (and arguably may be assessed retroactively). But this is not correct at this time because the constitutionality of South Dakota’s law has not yet been determined and the Court has indicated that a sales tax regime that does not meet all (or some) of the requirements listed above may not satisfy constitutional muster. The requirements a state tax regime must satisfy to survive Commerce Clause scrutiny will likely be litigated in the future.
The Wayfair test also creates and additional problem. Many remote sellers do business through a marketplace facilitator and some states have enacted laws that purport to require a marketplace facilitator to collect and remit use tax on behalf of remote sellers that use the marketplace facilitator’s services. But the Wayfair test does not address whether a remote seller’s indirect virtual contacts with a state, through a marketplace facilitator, are sufficient to satisfy the substantial nexus prong of the Complete Auto test. So at this time, it is not clear weather a state may compel a remote seller with only indirect virtual contacts with a state to collect and remit the states use tax. Nor is it clear whether a state may compel the marketplace facilitator to collect and remit use tax on behalf of its client, the remote seller. As a result, a remote seller that does business through a marketplace facilitator or a marketplace facilitator that actually has virtual contacts with the state should carefully evaluate their state tax exposure in light of the Court’s decision in Wayfair.
It is also important to note that in at least one state, Louisiana, sales tax economic nexus law is premised on a final decision by the United States Supreme Court on the constitutionality of South Dakota’s law in Wayfair. Because Wayfair was not a final decision by the United States Supreme Court on the constitutionality of South Dakota’s law, Louisiana’s economic nexus threshold law is inoperative unless amended. Similar laws in other states should be scrutinized to determine whether they are operative. In Louisiana and any other state with an inoperative economic nexus threshold for sales and use tax purposes, a taxpayer below the threshold in the inoperative law could be subject to sales and use tax if it satisfies the Wayfair test and the states sales and use tax regime does not otherwise violate the Commerce Clause.
A remote seller should evaluate its sales and use exposure in light of Wayfair, but it is premature to conclude that states and localities have free reign to impose sales and use tax collection obligations on a remote seller. It is also important to note that Wayfair may not alter state notice and reporting requirements. But states that are aggressively enforcing notice and reporting requirements, e.g., Connecticut and Washington, and the penalties associated with those requirements, are no longer likely to be willing to negotiate the waiver of penalties associated with those notice and reporting requirements in exchange for a remote seller’s commitment to prospectively collect and remit use tax on sales to in-state customers, unless the state’s existing sales and use tax regime is unlikely to survive Commerce Clause scrutiny as applied to a remote seller post-Wayfair.
It should also be noted that even though the Court laments the litigation that will arise from the expansion of the definition of physical presence to include cookies on in-state computers and similar items by states like Massachusetts and Ohio, the Wayfair decision could be read as tacitly endorsing those laws as correct. Depending how lower courts defined the Wayfair test, it is possible that a state and locality could rely on Wayfair to support a physical presence nexus theory below the economic and virtual contact threshold in Wayfair. More importantly, Massachusetts and Ohio may interpret the Wayfair decision as endorsing their approach and issue retroactive assessments based on their expanded physical presence standards.
Finally, a business considering restructuring its operations to fall below a state’s economic nexus threshold should note that the Wayfair test may set a low bar. And a state could thwart any restructuring by repealing its nexus threshold (assuming its sales and use was otherwise constitutional, which is not clear).
The Big Picture
Because the Wayfair test is linked to the substantial nexus prong of Complete Auto, the Wayfair decision marks the first time that the Court’s has established a test that appears to be intended to determine whether substantial nexus exists for all state tax regimes, e.g., income, franchise, sales and use, and property taxes. Unfortunately, the Court has left the new sufficiency standard in Wayfair undefined. As a result, lower courts will be required to determine which economic and virtual contacts with a state are sufficient to create substantial nexus. Note that it is not clear whether (or how) the “substantial virtual connections” standard articulated in Wayfair applies to the test. Nor is it clear whether targeted advertising or “instant access to most consumers via any internet-enabled device” creates an economic or virtual contact. After determining whether the taxpayer’s contacts create substantial nexus, the lower courts are also left to decide whether the state’s tax regime violates another aspect of the Commerce Clause, such as the undue burden test created in Pike v. Bruce Church (see Footnote 11) or another prong of the Complete Auto test.
A state may impose a higher nexus standard than the Constitution requires but it may not impose a lower standard. Many states have imposed higher standards, e.g., factor presence standards for income tax or click-through nexus standards for sales and use tax. But most state tax regimes extend to the extent permitted by the Constitution and any state legislature could repeal a higher standard in favor of a relying on the standard in Wayfair.
Any business with an economic or virtual presence (i.e., any business with a website that can be accessed remotely) should begin to evaluate the scope of its economic and virtual contacts with all other states to determine whether those contacts with other states are sufficient for purposes of the Wayfair test. This analysis should be conducted for any jurisdiction that levies any tax that the taxpayer may be subject to. It is important to note that because the Wayfair decision is premised on the Quill rule having always been incorrect, and despite the fact that the Court approved the lack of retroactivity in the South Dakota statute, the new rules may be interpreted by taxing jurisdictions as applicable retroactively. Accordingly, a business with an economic or virtual presence in any state may be subject to tax by that state and its political subdivisions for any period in which it has not filed returns, unless the taxing jurisdiction imposed a higher nexus threshold in all periods in which the taxpayer’s contacts with the state occurred. The financial statement implications of this analysis should not be overlooked.
Because the Court has left the new sufficiency standard undefined, a substantial amount of litigation is likely to result. Among other things, that litigation may test whether the floor of the new substantial nexus test is above or below the minimum contacts required by the Fourteenth Amendment Due Process Clause and whether a taxpayer must affirmatively target a state’s market. In addition, there will likely be a substantial amount of litigation regarding the scope of the Fourteenth Amendment Due Process Clause. Nonresident businesses will also likely challenge state taxes on the grounds that the discriminate or place an undue burden on interstate commerce.
Throughout its decision in Wayfair, the Court repeatedly notes that the Quill physical presence rule was an inappropriate intrusion on a state’s authority to make reasonable choices when enacting its tax regime, to collect taxes and to perform critical functions. This language may indicate that the Court is reevaluating the role of the judiciary reviewing state tax laws and that the court intends to give substantial deference to state tax regimes in the future. States and localities may assert this position in future tax litigation and it is not clear at this time whether state courts and lower federal courts will interpret the Court’s language in Wayfair in this manner.
Wayfair also appears to muddy the distinction between the due process and Commerce Clause analysis articulated in Quill by stating: “[t]he reasons given in Quill for rejecting the physical presence rule for due process purposes apply as well to the question whether physical presence is a requisite for an out-of-state seller’s liability to remit sales taxes.” The “reasons given in Quill” appears to be a reference to the “purposeful direction” language used by the court in Burger King. The “purposeful direction” language from Burger King has since evolved in other due process cases so it is not clear whether the Court also believes a similar standard should apply to the Wayfair test and, if so, what rule should apply.
The Wayfair test may also have implications for Public Law 86-272. P.L. 86-272 prohibits a state from levying a state income tax upon a taxpayer whose in-state business activity is limited to the solicitation of sales orders of tangible personal property that are sent outside the state for approval or rejection, and, if approved, are filled by shipment or delivery from a point outside the state. It is possible that the types of virtual and economic contacts contemplated in the Wayfair decision could inadvertently undermine P.L. 86-272. For example, that a state could construe a tracking cookie on an in-state customer’s computer as a business activity that exceeds solicitation.
The Wayfair decision also raises the issue of whether the Court is attempting to limit a taxpayer’s ability to structure its business in a manner that minimizes taxes or administrative burdens. Specifically, the majority cites the Judge Gorsuch’s concurring opinion in Direct Marketing: “[t]his guarantees a competitive benefit to certain firms simply because of the organizational form they choose while the rest of the Court’s jurisprudence is all about preventing discrimination between firms. It is likely that this language is dicta but a state or locality may attempt to rely on this language to contest a taxpayer’s choice of entity or business structure.
Finally, we note that Court’s reasoning in Wayfair for rejecting Quill is deeply flawed and appears at times to misunderstand which party sales and use tax are imposed on. For example, the court frequently references sales tax and on occasion incorrectly states that remote sellers are somehow shifting the tax burden to the customers of in-state business. While this is true in the minority of states in which the tax obligation is imposed on the vendor (for example, California), it is not the case throughout most of the country. Further, in overruling Quill, the Court also improperly appears to hold remote sellers responsible for the states’ inability to collect their own tax from their residents. This type of rhetoric abounds throughout the Wayfair decision.
The Wayfair decision removes prior limits that prevented states and localities from exercising nationwide jurisdiction over nonresidents operating in interstate commerce. It cannot be said to level the playing field for local businesses so much as it imposes significant compliance burdens on nonresident businesses which now must be understand and become compliant with the multiplicity of laws in all remote jurisdictions where their customers reside.
For additional information, please contact the Kean Miller SALT Team.
 Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
 National Bellas Hess, INc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967).
 Many localities within states also impose sales and use taxes. The discussion herein applies equally to the large number of political subdivisions within states that also impose these types of taxes.
 Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977)
 Complete Auto v. Brady. 430 U.S.at 279.
 Quill v. North Dakota, 504 U.S. at 313 and 318.
 S.D. Codified Laws §10-64-2.
 Justices Thomas and Gorsuch also filed concurring opinions.
 South Dakota v. Wayfair, slip op. at 7.
 Id. citing Granholm v. Heald, 544 U. S. 460, 476 (2005) and Pike v. Bruce Church, Inc., 397 U. S. 137, 142 (1970)
 South Dakota v. Wayfair, slip op. at 10.
 South Dakota v. Wayfair, slip op. at 11.
 South Dakota v. Wayfair, slip op. at 12.
 South Dakota v. Wayfair, slip op. at 13.
 South Dakota v. Wayfair, slip op. at 13 and 14.
 South Dakota v. Wayfair, slip op. at 14.
 South Dakota v. Wayfair, slip op. at 15.
 South Dakota v. Wayfair, slip op. at 16.
 South Dakota v. Wayfair, slip op. at 17.
 South Dakota v. Wayfair, slip op. at 17.
 South Dakota v. Wayfair, slip op. at 19-20.
 South Dakota v. Wayfair, slip op. at 20.
 South Dakota v. Wayfair, slip op. at 21.
 South Dakota v. Wayfair, slip op. at 22.
 South Dakota v. Wayfair, slip op. at 22 citing Polar Tankers, Inc. v. City of Valdez, 557 U. S. 1, 11 (2009).
 South Dakota v. Wayfair, slip op. at 23.
 South Dakota v. Wayfair, slip op. at 23.
 As of this writing, a bill, SB1, has been introduced in the Louisiana Legislature to change the effective date of the Louisiana law to a specific date, August 1, 2018, to remove references to the result in the Wayfair case.
 Note that actual language of the Wayfair test appears to be first articulated in Wisconsin v. J.C. Penny Co., 311 U.S. 435 (1940) and was originally stood for the proposition that a tax on a foreign corporation that registered to do business in a state satisfied the Fourteenth Amendment Due Process Clause. But because the Wayfair test was satisfied by economic and virtual contacts with a state, the Wayfair test should be considered as being undefined and should not be read as applying only to foreign corporations registered to do business in a state.
South Dakota v. Wayfair, slip op. at 15.
 South Dakota v. Wayfair, slip op. at 11.
 Quill v. North Dakota, 504 U.S. at 307-308 citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985).
 15 U.S. Code § 381.
 See Helvering v. Gregory, 69 F.2d 809, 810 (2nd Cir. 1934) (“Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”)
 South Dakota v. Wayfair, slip op. at 13 citing Direct Marketing Ass’n v. Brohl, 814 F. 3d, 1129, 1150– 1151 (10th Cir. 2016) (internal quotations omitted) .