Navigating 21st Century Tax Jurisdiction

58 Pages Posted: 14 Jan 2019 Last revised: 11 Sep 2020

See all articles by Hayes Holderness

Hayes Holderness

University of Richmond - School of Law

Date Written: January 11, 2019


Hailed as a massive victory for the states, the Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc. brought dated state tax jurisdiction standards into the twenty-first century, freeing the states to tax internet vendors. However, the decision left the larger state tax jurisdiction doctrine undertheorized and at a crossroads: should the doctrine concern itself only with notice and fairness issues akin to those found in the due process personal jurisdiction realm, or should it also concern itself with protecting interstate commerce from undue state tax burdens?

This Article argues for the latter path by developing a robust theory of state tax jurisdiction that focuses on the potential undue burdens of tax compliance costs, burdens that a threshold jurisdictional standard is uniquely able to address. From this compliance burden theory emerges a jurisdictional standard which would protect interstate commerce — particularly the activities of small businesses and entities that facilitate the commerce of others, such as online marketplaces, payment intermediaries, and common carriers — from the chilling effects of heavy state tax compliance costs. The Article concludes by demonstrating how unanswered questions from Wayfair provide opportunities to incorporate the proposed standard into the state tax jurisdiction doctrine, detailing the way forward from Wayfair.

Keywords: Wayfair, Substantial Nexus, Nexus, State and Local Tax, State Tax, Dormant Commerce Clause, Tax, Taxation, Tax Compliance, Quill, Sales Tax, Use Tax, Tax Jurisdiction

JEL Classification: K34

Suggested Citation

Holderness, Hayes, Navigating 21st Century Tax Jurisdiction (January 11, 2019). 79 Maryland Law Review 1, Available at SSRN: or

Hayes Holderness (Contact Author)

University of Richmond - School of Law ( email )

203 Richmond Way
University of Richmond School of Law
Richmond, VA 23173
United States

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