What was the significance of the Quill Corp v. North Dakota (1992) decision?

The ruling in Quill Corp v. North Dakota (1992) is significant because it established a key precedent regarding the ability of states to tax out-of-state businesses. Specifically, the Supreme Court concluded that states could not require businesses without a physical presence in the state to collect sales taxes on transactions with state residents. This decision was rooted in the Commerce Clause of the Constitution, which protects interstate commerce from excessive regulation by individual states.

The court determined that requiring businesses to collect sales tax for states where they do not have a physical footprint would create undue burdens and complexities for interstate commerce. This ruling effectively limited states' tax authority over remote sellers and influenced how online commerce and sales tax laws evolved in the years that followed, especially prior to the changes brought about by subsequent rulings like South Dakota v. Wayfair, Inc. in 2018, which overturned this precedent.