MajorsApr 01, 2026
Foundrae Sues Pandora for Allegedly Copying Its Medallion DesignsFoundrae also accused the jewelry giant of copying its mood board style of marketing.
EditorsSep 19, 2017
South Dakota, Online Sales Tax and the Supreme Court
Last week, South Dakota’s highest court shot down Senate Bill 106. Here’s why it matters in the ongoing fight over internet tax.
Unless you’re one of the 800,000-plus residents of South Dakota, it’s unlikely you’ve heard much about Senate Bill 106.
Introduced in the state legislature by a bipartisan group of seven senators and eight representatives last year, S.B. 106 mandates that companies that make more than $100,000 in sales or have more than 200 transactions per calendar year in South Dakota remit sales tax, whether they have a physical presence in the state or not.
In introducing the bill, legislators argued that, first, the state needs the revenue it’s missing from online sales and, second, that the current law of the land, so to speak--Quill Corp. v. North Dakota--needs to be re-evaluated.
Quill is the U.S. Supreme Court ruling from 1992 that prevents states from collecting sales tax from sellers with no physical presence in the state; the overarching argument of internet tax proponents everywhere is that this 25-year-old law is now wildly outdated given how consumers shop today.
S.B. 106 passed both houses with little opposition and South Dakota’s Republican governor, Dennis Daugaard, signed it into law in March 2016.
It wasn’t long after the bill’s passage that three online retailers, Overstock.com Inc., WayFair Inc. and NewEgg Inc., pushed back and the case wound its way through South Dakota’s legal system, landing with the state Supreme Court in short order.
Salt Lake City-based Overstock.com sells a variety of merchandise, including fine jewelry, ranking among the $100 Million Supersellers in the 2016 State of the Majors report and, spoiler alert, in the soon-to-be-published 2017 edition as well.
WayFair, meanwhile, is a Boston-based online seller of furniture and home décor, and City of Industry, California-headquartered NewEgg is an electronics retailer.
In a ruling issued last Wednesday authored by Chief Justice David Gilbertson, the court sided with the e-tailers, stating that: “However persuasive the state’s arguments on the merits of revisiting the issue, Quill has not been overruled. Quill remains the controlling precedent on the issue of Commerce Clause limitations on interstate collection of sales and use taxes.”
Despite the court’s siding with the internet sellers, Chris Fetzer of Haake Fetzer, the firm that lobbies for Jewelers of America on behalf of the industry in Washington, said that the authors of the bill do not view the ruling as a failure.
It is, in fact, exactly what they wanted.
“It was fully expected that it (S.B. 106) would be challenged as illegal. This law was written to be challenged within
the court such that that the challenge could serve as a vehicle for the U.S. Supreme Court’s reconsideration of the Quill decision,” Fetzer told me Monday, adding that similar actions are being taken in other states, including Indiana and Alabama.
What has compelled them is a recent statement from U.S. Supreme Court Justice Anthony Kennedy in the DMA vs. Brohl case, which reads in part: “[T]he internet has caused far-reaching systemic and structural changes in the economy” so that “a business may be present in a state in a meaningful way without that presence being physical in the traditional sense of the word.”
He said that it is “unwise [for the U.S. Supreme Court] to delay any longer a reconsideration of the court’s holding in Quill.”
I reached out to Overstock.com, the lone jewelry retailer out of the three, for comment on the ruling and Kennedy’s comments late Monday afternoon.
The company was not able to respond by press time, but board Chairman Jonathan Johnson told Bloomberg that proponents of online sales tax are putting too much emphasis on that statement from Kennedy and have no assurances that the U.S. Supreme Court will take up the case or, if it does, rule in their favor and overturn Quill.
I think the statement from Justice Kennedy is pretty clear, but Johnson is right about one thing: There is no guarantee that the Supreme Court will decide to hear the case, though the chances increase if more states get involved.
Fetzer said typically, what most attracts the Supreme Court to take up a case is a “circuit split,” when multiple federal appeals courts have ruled in conflict on a given issue.
That is not at play in this instance, but what also can be attractive is when there’s an issue that multiple states are concerned about, which could happen here as more states could join South Dakota in petitioning the Supreme Court to review Quill.
Johnson also is right about another thing: There is no guarantee the court will rule to overturn Quill even if it does take up the case.
But, Fetzer points out, Kennedy’s comments indicate that he would be in favor of changing Quill and the court’s newest justice, Neil Gorsuch, also has expressed his support for the arguments that have long been put forth by internet sales tax proponents.
The court’s next term commences in October, so there’s a chance it could revisit the Quill decision between next month and June 2018.
We’ll keep you posted.
What has compelled them is a recent statement from U.S. Supreme Court Justice Anthony Kennedy in the DMA vs. Brohl case, which reads in part: “[T]he internet has caused far-reaching systemic and structural changes in the economy” so that “a business may be present in a state in a meaningful way without that presence being physical in the traditional sense of the word.”
He said that it is “unwise [for the U.S. Supreme Court] to delay any longer a reconsideration of the court’s holding in Quill.”
I reached out to Overstock.com, the lone jewelry retailer out of the three, for comment on the ruling and Kennedy’s comments late Monday afternoon.
The company was not able to respond by press time, but board Chairman Jonathan Johnson told Bloomberg that proponents of online sales tax are putting too much emphasis on that statement from Kennedy and have no assurances that the U.S. Supreme Court will take up the case or, if it does, rule in their favor and overturn Quill.
I think the statement from Justice Kennedy is pretty clear, but Johnson is right about one thing: There is no guarantee that the Supreme Court will decide to hear the case, though the chances increase if more states get involved.
Fetzer said typically, what most attracts the Supreme Court to take up a case is a “circuit split,” when multiple federal appeals courts have ruled in conflict on a given issue.
That is not at play in this instance, but what also can be attractive is when there’s an issue that multiple states are concerned about, which could happen here as more states could join South Dakota in petitioning the Supreme Court to review Quill.
Johnson also is right about another thing: There is no guarantee the court will rule to overturn Quill even if it does take up the case.
But, Fetzer points out, Kennedy’s comments indicate that he would be in favor of changing Quill and the court’s newest justice, Neil Gorsuch, also has expressed his support for the arguments that have long been put forth by internet sales tax proponents.
The court’s next term commences in October, so there’s a chance it could revisit the Quill decision between next month and June 2018.
We’ll keep you posted.
More on Editors
The Latest
Events & AwardsApr 01, 2026
AGA Opens 2026 Gemological Scholarship, Research Grant ApplicationsApplications are open for the AGA Gemological Scholarship Program through May 15, and until June 2027 for the Gemological Research Grant.
ColumnistsMar 31, 2026
Q1 Clues That Reveal Where Your Jewelry Store’s Sales Are Heading These customer behavior patterns say a lot about how successful your jewelry store is going to be this year, Emmanuel Raheb writes.
Brought to you by
Protect Your Customers and Your BusinessYou deserve to know what you are selling–to protect your customers as well as your business and your reputation.
CollectionsMar 31, 2026
Mejuri Adds Silver to ‘Puzzle’ CollectionMejuri’s popular collection of 18-karat yellow gold vermeil rings debuted in sterling silver alongside new “Puzzle” slider charms.
Weekly QuizMar 26, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
CollectionsMar 31, 2026
Buddha Mama, Ashley Longshore to Host Pop-Up in DallasThe Miami-based jewelry brand and the NYC-based artist will be in Dallas from April 9-11.
SourcingMar 31, 2026
NDC Designates April 8 as 'World Diamond Day'The initiative invites those in the industry to share stories on social media highlighting the meaning and impact of natural diamonds.
Brought to you by
Is This You? Every Jeweler Has This Problem; We Have the Solution.Every jeweler faces the same challenge: helping customers protect what they love. Here’s the solution designed for today’s jewelry business.
SourcingMar 31, 2026
GIA VP Jillian Wolk to Take Over at Tracr Wolk’s first day on the job as CEO of Tracr, De Beers Group’s blockchain platform, will be May 1.
TrendsMar 30, 2026
Oscar Heyman Debuts First Spring CatalogThe new catalog, which showcases 35 one-of-a-kind pieces of jewelry, is a compliment to the company’s popular holiday catalog.
SourcingMar 30, 2026
Rio Tinto Hauls Last Load from DiavikProduction has ceased at the Canadian diamond mine, which has yielded more than 150 million carats of rough diamonds in its 23-year run.
MajorsMar 30, 2026
Tanishq Opens First New England LocationThe store opening marks the 10th United States location for the India-based jewelry retailer.
MajorsMar 27, 2026
Saks Global Has Changed Its Mind About Closing These 3 StoresTwo Saks Fifth Avenue locations, one in Florida and one in California, and one Neiman Marcus store are off the chopping block.
IndependentsMar 27, 2026
Jimmy West, Longtime LJG Executive Director, Dies at 72West, who started in the art department at the Leading Jewelers Guild in 1979, is remembered for his patience, kindness, and dedication.
CollectionsMar 27, 2026
Itä’s ‘Yarí Whirl’ Ring Tells Every Side of the StoryIn the “Tesoro” version of the ring, our Piece of the Week, each side of the gold hexagonal nugget has a unique colored gemstone design.
WatchesMar 26, 2026
Q&A: Citizen Watch America President Jeffrey Cohen on Eco-Drive’s 50th AnniversaryCohen discusses the evolution of Citizen’s light-powered technology, the brand’s cross-generational appeal, and tariffs.
IndependentsMar 26, 2026
Peter Smith Pens Book on Human Behavior in Sales“Essentially Human: On Sales and Salespeople" reveals the underlying human traits and behaviors of the most successful sales professionals.
CollectionsMar 26, 2026
Lionheart Celebrates 13 Years of ‘Cassandane’The collection features symbols of love, luck, and light, based on the story of Queen Cassandane and Cyrus the Great of Persia.
Events & AwardsMar 26, 2026
NAJA, Instappraise Introduce New ScholarshipIt’s the third scholarship to be launched as part of the partnership to help appraisers advance their professional credentials.
Events & AwardsMar 26, 2026
JA Still Accepting Entries for 2026 CASE AwardsThe deadline for entries in the jewelry design competition has been extended to April 3.
SourcingMar 25, 2026
Rob Bates Steps Down as JCK News Director After 28 years with JCK, the veteran industry journalist is launching his own publication on Substack called The Jewelry Wire.
GradingMar 25, 2026
New York’s Natural History Museum, Wiley To Build Minerals DatabaseWiley said the project will give scientists worldwide access to the American Museum of Natural’s History renowned mineral collection.
CollectionsMar 25, 2026
Boochier Turns Flower Friendship Bracelets Into Fine JewelryThe “Flower Puff” collection looks to beaded flower friendship bracelets from childhood, turning the silhouette into nostalgic fine jewelry.
Policies & IssuesMar 25, 2026
Community for Ethical Jewelry to Host Bench Jeweler Shortage WebinarSet for April 2, the webinar will discuss how the jewelry industry can address the workforce gap.
IndependentsMar 24, 2026
Lisa Bayer, Illustrator and Beloved Member of the Muse Family, Dies at 64Bayer, founder of Lisa Bayer Designs, is remembered as “a bright light in every room.”
AuctionsMar 24, 2026
White Diamonds Shine In Christie's Jewels Online SaleThe highest-grossing lot was a Tiffany & Co. ring set with a flawless, emerald-cut diamond of 10 carats.
SourcingMar 24, 2026
AGTA Solidifies Tucson Dates For 2027-2029The next three editions of AGTA GemFair Tucson will feature a five-day show that includes Sunday.
