Wayfair Undermines Nicastro: The Constitutional Connection Between State Tax Authority and Personal Jurisdiction

Abstract

This Essay exposes connections between two controversial cases that unsettled two ostensibly distinct areas of constitutional law. The Supreme Court’s 2018 decision in South Dakota v. Wayfair held that the Commerce Clause permits enforcement of sales taxes against online retailers with no physical presence in the taxing state. In contrast, the Court’s 2011 decision in J. McIntyre Machinery v. Nicastro held that the Due Process Clause prevents states from exercising personal jurisdiction over nonresident manufacturers who did not target the forum. Wayfair and Nicastro address conceptually similar questions about extraterritorial enforcement of state law yet rely on inconsistent assumptions. A close reading of Wayfair illuminates normative and practical insights that warrant narrowing or overruling Nicastro. More generally, this Essay highlights how situating doctrinal problems in the broader context of horizontal federalism can improve constitutional analysis.

Keywords: Personal Jurisdiction, Tax Jurisdiction, State and Local Tax, Horizontal Federalism, Due Process, Commerce Clause, Extraterritorial Regulation, E-Commerce, Sales Taxes, Use Taxes, Wayfair, Nicastro, Quill, Constitutional Law, Supreme Court

JEL Classification: H71, K34, K41