Article Title

The Slow-Me State: The Emergence of Internet Sales Taxation and Missouri’s Anomalous Response


Claire Hawley


In South Dakota v. Wayfair, Inc., the United States Supreme Court fundamentally reshaped more than a century of precedent on the Dormant Commerce Clause. While this decision carries far-reaching implications, this Note is primarily concerned with its impact on state sales taxation and Missouri’s anomalous – and extremely costly – response. The authority of states to levy taxes on interstate commerce has traditionally been limited to retailers with a physical in-state presence. Founded on Due Process and Commerce Clause considerations, this rule was originally articulated in response to attempts by state governments to tax the sales of mail-order retailers. Over time, largely due to the explosive growth of e-commerce, this rule became grossly misaligned with the realities of the modern economy and unduly burdensome on state taxation authorities. Large online retailers like Amazon and eBay were legally able to avoid paying state sales and use tax on goods shipped to state residents. Amidst growing opposition from the states, the physical presence rule was recently abrogated by the Supreme Court in Wayfair. Now, states can collect sales and use tax from out-of-state sellers as long as those sellers have a “substantial nexus” within the state. In the wake of Wayfair, almost all of the states with an existing sales tax regime have enacted legislation to implement an Internet sales tax. Missouri is one of two states that has yet to do so. What is causing this anomalous delay and, most importantly, what is it costing Missouri residents? This Note ultimately concludes Missouri’s delay – which is caused by the complexity of its existing sales tax regime and the Republican-controlled state legislature’s gridlock is costing its residents an estimated $165 million every year.