According to the U.S. Supreme Court, businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

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This is known as the "physical presence" or "nexus" rule, which was established in the Supreme Court case Quill Corp. v. North Dakota in 1992. However, some states have since enacted laws that require online sellers to collect sales tax regardless of physical presence, and there have been ongoing debates over whether the Supreme Court should revisit and potentially overturn the Quill decision.