AuctionsJun 26, 2026
‘Hogback’ Diamond Ring Finds a New Home A ring set with “hogback” diamonds, an early stone cut dating to around the 16th century, sold for more than $20,000 at a U.K. auction.
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in the state; the overarching argument of internet tax proponents everywhere is that this 25-year-old law is now wildly outdated given how consumers shop today.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
CollectionsJun 26, 2026
Strength Is Sharpened Into Beauty in Kris Averi’s ‘Prism Thorn’ RingThe rainbow version of the ring, our Piece of the Week, features angel-cut, octahedral lab-grown sapphires designed to be worn as armor.
MajorsJun 26, 2026
Rembrandt Charms Debuts ‘Charms That Give Back’The new initiative donates a portion of the proceeds from select charms to charitable causes.
Brought to you by
Wedding Band Trends 2026: Personalization Takes Center StageColored gemstones, artisan finishes, mixed metals, and meaningful details are shaping demand in bridal jewelry.
TrendsJun 26, 2026
Bernard James Celebrates Knicks’ Win with RingThe Brooklyn-based jeweler created a limited-edition version of its “Aura” eternity band, set with gemstones in the team’s colors.
Weekly QuizJun 25, 2026
This Week’s QuizTest your jewelry news knowledge by answering these questions.
SourcingJun 25, 2026
ICA Names Brandee Dallow as CEODallow will lead the International Colored Gemstone Association, effective July 6.
CollectionsJun 25, 2026
Mejuri Experiments With SteelIts new capsule jewelry collection features gold-finished stainless steel pieces designed for a maximalist look without a luxury price tag.
Brought to you by
Building the Future of Jewelry Retail: DCA Expands Education, Leadership Development, and Workforce SolutionsDCA is preparing the next generation of professionals by supporting workforce development, leadership growth, and career advancement.
Events & AwardsJun 25, 2026
Watches & Wonders Announces 2027 DatesThe week-long event in Geneva is slated for April 2027.
SourcingJun 25, 2026
Annie Doresca, Mark Smelzer, Sara Yood Join Gem Legacy BoardThe three industry leaders bring financial, communications, and legal expertise to the nonprofit’s board of directors.
ColumnistsJun 24, 2026
The Revenue Hiding Between Your Counter and Your Online CartJewelers are missing out by not offering this one key add-on at the online point of sale, Emmanuel Raheb writes.
CollectionsJun 24, 2026
Greenwich St. Jewelers, Jewel Boxing’s Latest Drop Is On-TrendThe fourth collaborative collection from the retailer and jewelry content creator focuses on gemstone charms and strands of colorful beads.
Events & AwardsJun 24, 2026
AGTA Accepting Entries for Spectrum 2026This year’s AGTA Spectrum & Cutting Edge Awards will feature two new categories.
SourcingJun 24, 2026
Columbia Gem House To Offer Alexandrite Melee OnlineThe collection features traceable alexandrite from Brazil in calibrated sizes that is sorted by grade.
MajorsJun 24, 2026
CaratLane Names New Chief Sales OfficerDhaval Raja has been appointed to the role.
CollectionsJun 23, 2026
Francesca Villa Goes ‘On the Road’The capsule collection looks to vintage trunk pins that echo the spirit of speed, freedom, and the mythology of the American road trip.
SourcingJun 23, 2026
New Paraíba Tourmaline Source Reportedly Discovered in EthiopiaSSEF issued a notice about the potential new source of the sought-after gemstone, citing “credible reports” from trade sources.
MajorsJun 23, 2026
Etsy Says ‘Shop Other Jeffs’ This Prime DayAs Amazon Prime Day kicks off, Etsy is encouraging shoppers to support small businesses.
Events & AwardsJun 23, 2026
AGA Announces 2026 Scholarship WinnerCole Winward is the recipient of 2026 AGA Gemological Scholarship.
Events & AwardsJun 22, 2026
Plans Announced for New Trade Show in BaselScheduled for April 2027, Basilia will be the first watch and jewelry trade show held in Basel since the collapse of Baselworld in 2020.
Events & AwardsJun 22, 2026
Gem Awards Opens 2027 Nomination PeriodSubmissions for the milestone 25th annual Gem Awards will be accepted across three categories from now through July 31.
WatchesJun 22, 2026
Snoopy Inspires New ‘Flying Ace’ Ball WatchThe beloved beagle dons his aviator outfit for the new Engineer Master II Snoopy Flying Ace timepiece.
AuctionsJun 18, 2026
Paraíba Tourmalines Sell for $3.4M at Sotheby'sThe recent high jewelry auction, which also featured the sale of a 10-carat blue diamond, was “a celebration of color.”
CollectionsJun 18, 2026
Michelle Obama Wears Almasika Earrings Symbolizing Feminine PowerShe wore the “Le Cauri Endiamanté” earrings, our Piece of the Week, in the Obamas’ first dual portrait for the Obama Presidential Center.
PodcastsJun 17, 2026
Episode 6: Las Vegas 2026-Trends, Traffic, Broken BathroomsCouture’s Michelle Orman joins Amanda Gizzi and Michelle Graff for this special post-Market Week episode of My Next Question.
GradingJun 17, 2026
SSEF Issues Warning on Refilled EmeraldsThe lab is seeing emeralds with filler added post-testing enter the market, accompanied by reports that indicate little to no treatment.
WatchesJun 17, 2026
Patek Philippe’s ‘Visionary’ Leader Philippe Stern Dies at 88 The third generation of the Stern family to head Patek Philippe, he navigated the “quartz crisis” and preserved the brand’s independence.
