In 1992, the Supreme Court ruled in Quill v. North Dakota that if a company did not have a “physical nexus” within the state, that state could not require the company to collect sales taxes from its customers. However, residents of states with income taxes are supposed to voluntarily pay a “use tax” on such out-of-state transactions when they file their tax returns. As the number of online transactions continue to grow, there has been an ongoing debate over brick-and-mortar sellers versus online sellers, and many states are seeking “lost” sales tax revenue from these online activities.

These states are attempting to enact legislation that would require remote sellers to remit a sales tax in what many are calling the “kill Quill” movement. Remote sellers would be required to remit a sales tax once their sales in the state reach a certain dollar or transaction threshold.