The SCOTUS decision allowed the states to establish the concept of an “economic nexus.” This means that a business does not need to have a physical presence in

The SCOTUS decision allowed the states to establish the concept of an “economic nexus.” This means that a business does not need to have a physical presence in the state, but only meet certain transactional threshholds, such as the number of transactions, or the value of those transactions. However, this presumes that the buyer takes delivery of a physical product in the state itself. In other words, it is not residence in the state, but where the buyer takes possession of a product that determines whether a seller must collect sales tax. There has to be a shipping address within the state for a transaction to qualify as taxable in that state. So where does a buyer take possession of an online service? There is no shipping address. Most state laws do not yet deal with online services, and the SCOTUS decision is not specific enough to allow such services to be taxed based upon the residency of the buyer.