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Multistate Challenges to Quill Physical Presence Standard: Navigating Nexus in State Sales and Income Tax

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, August 30, 2017

Recorded event now available

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This course will provide SALT practitioners and Corporate Tax professionals charged with sales tax oversight responsibilities with an updated look at states’ efforts in key states to expand what constitutes a physical presence for sales tax collection and remittance purposes or to bypass the landmark Supreme Court standard adopted in Quill in an effort to increase tax revenues from internet sales.


As the retail sales landscape continues to change from in-store purchases made from brick-and-mortar locations, states are constantly seeking ways to make up sales tax revenue shortfalls. A significant component of these efforts is comprised of states seeking ways to impose sales tax jurisdiction over internet-based sales shipped to individuals within their states. However, states have been limited in their tax reach by the "physical presence" standard articulated in Quill v North Dakota. Several states have enacted statutes, regulations or administrative guidance to try to challenge or reinterpret Quill, through alternate economic or factor presence standards.

For nonresident companies making sales into those states seeking to challenge Quill, these efforts present significant reporting, collection and remittance challenges, as well as uncertainty as to whether they should comply with these questionably constitutional laws. Tax advisers are constantly faced with the task of keeping up with various states' interpretations of just what constitutes taxable "presence," beyond the traditional understanding of what the Supreme Court held as physical presence.

Tax advisers should be keenly aware of the status of various state initiatives. South Dakota will almost certainly appeal its loss in Wayfair to the Supreme Court, and several other states including Alabama have pending challenges as they also seek to broaden tax jurisdiction to cover internet sales. Despite these constitutional challenges, several states have introduced and enacted factor presence economic nexus legislation during the first half of 2017, including Indiana, Maine, North Dakota and Wyoming.

Listen as our experienced panel provides a current update on key states' initiatives to circumvent or challenge the long-established Quill standard of physical presence as a prerequisite to imposing state sales or income tax.



  1. Current Quill Standard Requiring Physical Presence
  2. State legislative challenges to Physical Presence standards: Sales/transaction thresholds
    1. South Dakota
    2. North Dakota
    3. Wyoming
  3. Other states’ regulatory challenges to Quill
    1. Alabama
    2. Tennessee
    3. Massachusetts
  4. States that have successfully enacted economic nexus legislation in the first half of 2017
    1. Indiana
    2. Maine
    3. Wyoming
    4. North Dakota
  5. Other expansive efforts taken by states
    1. Marketplace provider nexus provisions
    2. Notification and reporting laws
  6. Planning strategies in anticipation of possible reversal of Quill


The panel will reviews these and other important topics:

  • States that are currently presenting or contemplating statutory challenges to Quill's physical presence standard
  • Mitigating risk in anticipation of the reversal of Quill
  • How apportionment factors impact how a company may reach revenue or transactions thresholds.
  • Risks and possible benefits of waiting to determine further state actions in terms of statutes challenging Quill standard


Dion, Sylvia
Sylvia F. Dion, CPA

Founder & Managing Partner
PrietoDion Consulting Partners

Ms. Dion's firm specializes in providing SALT consulting and compliance Services to companies throughout the U.S....  |  Read More

Timothy A. Gustafson
Timothy A. Gustafson

Eversheds Sutherland

Mr. Gustafson counsels clients on all aspects of state and local tax controversy, including audits, administrative...  |  Read More

Ortiz, James
James A. Ortiz

Principal, State and Local Tax

Mr. Ortiz concentrates on the State & Local Tax field, specializing in sales and use tax, and multistate income...  |  Read More

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