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South Dakota v. Wayfair, Inc: Tough Thursday for Forecasters

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Opinion

by Ryan Adler

Ryan Adler is a Superforecaster and Senior Consultant for Good Judgment who specializes in legal analysis for Good Judgment’s question writing team. He also administers the SCOTUS Challenge on Good Judgment Open, a collaboration between SCOTUSblog and Good Judgment that facilitates probabilistic thinking about court decisions. Ryan can be reached at adler@goodjudgment.com.

While today may soon be declared a national holiday by the Government Finance Officers Association, this morning’s release of the Court’s decision in South Dakota v. Wayfair, Inc. was a taxing moment in a SCOTUS Challenge finally wrapping up.  Long story short, the Justices scrapped what most agree was an archaic constraint on state & local sales tax assessments.  You see, impulse shopping was once relegated to the occasionally-shiny pages of what ancient Americans called “catalogues.”  These bound volumes made from the flesh of martyred trees where the foundation of retail shopping for goods that would be shipped in from all over the world.  As most geography experts will tell you, when goods are delivered from around the world, they often cross state lines in the process.  And as we all know, state lines tend to raise important questions, including questions on state authority versus federal authority.

On this backdrop of mail-order commerce, the Supreme Court held for decades that in order for a state to be able to assess sales taxes on retailers, those retailers had to have an actual physical presence in that state.  So, if I walked to the local store and bought a pair of shoes, I might have to pay sales tax on the purchase.  If I would order them from a place that had no stores in my state, then I wouldn’t have had to pay any sales tax.  Now that the requirement is gone, thousands of jurisdictions with sales taxes can force the seller to collect for them.

And while the crowd may have to pay more for things than before, it apparently didn’t see it coming.  With forecasters only giving today’s outcome a 38% chance, today was not a win.  I find this interesting because the crowd had the case going the other way before oral arguments.  So, forecasters saw oral arguments as relevant, but went the wrong way.  How much of that was due to participating forecasters changing their predictions versus new forecasters with a different view coming on board?  Analysis of the data will give us at least some idea, but my gut tells me that having fewer than a hundred forecasters looking at the question played a not insubstantial role.  

Side note: I have a hunch that the next decade will show that of all the Justices’ words published today, Kennedy’s concurrence in Pereira v. Sessions will be seen as incredibly insightful.

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