The State of South Dakota passed a law requiring out-of-state retailers to remit sales taxes for sales of items to persons in the state at the same rate as if the retailer existed in the state. The State then litigated the issue against online retailer Wayfair, Inc., suffering losses until it was grated certiorari by the Supreme Court which subsequently overruled a previous, long-standing precedent barring states from conscripting tax collectors from another jurisdiction, citing untenable and flawed reasoning resulting in significant loss of state sales tax revenue due to technological change.
The opinion of the Supremes in this case is here if you are interested in reading it. I am not going to dive into the details of the opinion here, because it is plainly obvious that the technological reality is that the sales tax is quickly becoming obsolete, and that fact alone is in no way an excuse to infringe upon the sovereignty of another state or empower a state to impair an individual a nation away that has nothing to do with that state or its revenue woes.
With the dubbed “commerce clause” existing in Article I, Section 8 (Powers of Congress), nowhere does the Constitution state or imply that the Supreme Court has the power to regulate interstate commerce. While a very fine line often exists in commerce clause cases between the normal course of Constitutional and law interpretation, supposedly “calling the balls and strikes,” there is no such fine line here. There was no Federal law in question, as there is no such law which would be the source of Federal commerce clause exercise, a power that the States do not have. Despite much commentary in many of the dissenting opinions of the 2017 session regarding the Court’s role in settling controversies rather than taking it upon itself to dictate law, in this case, with only one dissenting opinion, the Court takes it upon itself to exercise the power to regulate interstate commerce by regulating it in favor of state tax revenue while individuals can now be hounded for money from anywhere by a sovereign they have nothing to do with.
And I think we can bet that the “reach out and tax someone” precedence is only the beginning. If states can now tax sales from anywhere, they can tax income, estates, or whatever, simply by proving some significant commercial interest. Warren Buffett’s estate may end up owing billions to each and every state his trains run through.
This is well beyond absurd.