Congress Hears from Small Businesses about Problems Caused by Wayfair.

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Cory D. Halliburton

Cory D. Halliburton



Cory Halliburton serves as general counsel and business adviser to a nationwide nonprofit / tax-exempt client base, as well as for multi-state professional service companies. He is a results-oriented attorney, with executive-level strategy and an understanding of the intersection of law and business judgment. With a practical upbringing, he pushes for process-driven results in internal governance, strategy and compliance with employment law, and complex or unique contracts and business relationships.

He dedicated the first ten years of his practice to mainly commercial litigation matters in West Texas and the Dallas-Fort Worth Metroplex. During that experience, Mr. Halliburton transitioned his practice to a more general counsel role, with an emphasis on nonprofit and tax-exempt organizations, advising those organizations through formation, dissolution, litigation, governance, leadership succession, employment law, contracts, intellectual property, tax exemption issues, policy creation, mergers and other. He has served as borrower’s counsel for tax-exempt bond and loan transactions near $100 million aggregate; some with complex pre-issue construction, debt payoff and other debt financing challenges.

Mr. Halliburton also serves as outside legal and business advisor for executive professionals in multi-state engineering firms, with a focus on drafting and counsel on significant service agreements, employment law matters, and protection of trade secrets.

On June 14, 2022, the Senate Finance Committee heard testimony on the impact on small businesses and remote sales of the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080, 201 L. Ed. 2d 403 (2018).

In Wayfair, the U.S. Supreme Court ruled that a business’s physical presence in a state (or lack thereof) wasn’t determinative for purposes of whether a state could require the business to collect sales and use taxes from customers located in the state.[1] Overturning decades of precedent, the decision effectively gave states the green(ish) light to force remote sellers to collect sales and use taxes.[2]

Witnesses before the committee discussed a number of difficulties that remote sellers were having in complying with tax collection requirements across multiple states. These include dealing with varying dollar and transaction thresholds, different items subject to sales and use tax, the complexity of local taxes, and costs associated generally with staying compliant across multiple jurisdictions.

There were also calls for Congress to take action to regulate the states’ power to impose tax collection requirements on remote sellers (although how realistic this remains uncertain).

For more information on this topic, please see our post on The New “Wayfair” Sales Tax Laws in Texas.


[1] Wayfair, 138 S. Ct. at 2099. The Wayfair decision turned on the Court’s interpretation of the Commerce Clause of the U.S. Constitution. The Commerce Clause gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” U.S. Const. art. I, § 8, cl. 3. The Court noted that, “[a]lthough the Commerce Clause is written as an affirmative grant of authority to Congress, . . . in some instances it imposes limitations on the States absent congressional action.” Wayfair, 138 S. Ct. at 2089. Going forward, the question of whether a taxpayer has substantial nexus with a taxing state is to be determined based on whether the taxpayer “‘avails itself of the substantial privilege of carrying on business’ in that jurisdiction.” Wayfair, 138 S. Ct. at 2099 (quoting Polar Tankers, Inc. v. City of Valdez, 557 U. S. 1, 11, 129 S. Ct. 2277, 174 L. Ed. 2d 1 (2009)).


[2] Cases holding that physical presence was a must in this context include National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753, 87 S. Ct. 1389, 18 L. Ed. 2d 505 (1967) and Quill Corp. v. North Dakota, 504 U. S. 298, 112 S. Ct. 1904, 119 L. Ed. 2d 91 (1992). The Court decided to reverse course in light of the far-reaching technological and social changes caused by the Internet in the years since the Quill decision came down. However, there’s still a live question of whether certain aspects of a state’s tax system may impose an undue burden on interstate commerce that would render its application to remote sellers unconstitutional. Wayfair, 138 S. Ct. at 2099-100.