Short abstract:

The paper uses the US Supreme Court's Wayfair v. South Dakota decision, which allows local jurisdictions to collect sales tax from online retailers and marketplaces, to test theoretical concepts derived from actor-network theory and organizational studies regarding state crisis in the digital age.

Long abstract:

This paper merges actor-network, assemblage theory, and organizational studies to study the consequences of the United States Supreme Court’s (SCOTUS) Wayfair v. South Dakota (2018) decision. The decision upheld a South Dakota law requiring businesses located outside the state to collect South Dakota sales taxes for items sold through the internet. Following Wayfair, scores of states and local jurisdictions have adopted sales tax laws similar to South Dakota's. The resulting regulatory environment has been challenging for businesses, who find it difficult to determine the appropriate tax rate for different transactions and collect and remit the taxes on time. The Supreme Court assumed that its decision would result in jurisdictions standardizing procedures to facilitate sales tax collection. But this has not happened. Many jurisdictions have chosen to abide by their prevailing set of definitions and operations in the post-Wayfair world. The paper proposes to use Wayfair as a case study to investigate ideas concerning governance and state formation in the digital age. More specifically, it proposes to test the hypothesis that jurisdictions adopting strategies of what can be termed “expansive association” in legal and technological terms will report increased power, benefits, and satisfaction with taxation functions relative to jurisdictions adopting strategies of “conservative association”. To test this hypothesis, a study of sales tax collection in the state of Colorado (US) is described.