Wayfair v. South Dakota: The Supreme Court Sales Tax Case Explained
By Timo Bakker · July 6, 2026 · 5 min read
The Supreme Court's June 2018 decision in South Dakota v. Wayfair, Inc. allowed states to require online retailers to collect sales tax even without physical presence. This has triggered several class action settlements. Here is the plain-English explainer.
What Wayfair changed
Before Wayfair, states could not require online retailers to collect sales tax unless the retailer had "physical presence" in the state (offices, warehouses, sales reps). Wayfair overturned that rule, allowing "economic nexus" — if a retailer had sufficient sales in a state, they had to collect tax.
Follow-on class actions
- Over-collection cases. Some online retailers over-collected sales tax post-Wayfair (charging California rates to Nevada customers, for example). Multiple class actions and refunds.
- Marketplace facilitator cases. Cases over whether Amazon, Etsy, eBay properly collected tax on marketplace seller transactions.
- Wayfair-based individual state cases. Retailers challenging state-specific implementations of the Wayfair standard.
Am I eligible?
If you shopped online between 2018 and now and think you were charged sales tax in a state where you did not live, check settlement notices. Complex — most consumers do not track this closely.
How to file
Wayfair-related class actions are still moving through courts. Check the directory for currently-fileable ones.