An Assessment of the Supreme Court's Ruling in South Dakota V. Wayfair: A Macromarketing Case Study

Abstract

Years ago Shelby Hunt noted that cromarketing focuses on marketing systems, the impact of marketing systems on society, and the impact and consequences of society on marketing systems. The ruling by the United States Supreme Court enabling states to require remote sellers to collect and remit sales taxes on in-state purchases exemplifies the latter. Imposing a new tax burden on previously untaxed remote sellers has the power to alter the structure of retailing and impact consumer welfare. Responding to “new economic realities,” the Court reversed long-standing precedent requiring that sellers must have a physical presence in the state to be subject to taxation. Proponents viewed this as a major step in restoring lost tax revenues to the states. Critics point to the inconsistency of the Court's ruling with stare decisis, the regressive nature of sales taxes, and recent public policy mandates stemming from the Covid pandemic. Although the Wayfair ruling is now the law and many of the concerns voiced prior to the Court's action seem to have been unfounded, the macromarketing implications remain. The potential impact of public policy on retailing cannot be ignored nor should the regressive nature of an increase in sales taxes on income inequality be overlooked. Additionally, there remain questions of fairness and administration with the ruling. Students of macromarketing should not ignore these issues. The responsibility to examine the impact of society—and the Court—on marketing systems was reinforced years ago by Bartels and Jenkins: “…the goal of marketing is the achievement of entrepreneurial goals in a manner consistent with the best overall interests of society… Macro models represent value judgments made by society for society; by governments in the form of laws, administrative orders, and judicial decisions…and by others who assume the role of advocating what is best for the general welfare.”