The Commerce Clause of the U.S. Constitution expressly gives Congress the power to regulate interstate commerce.  It then follows that states can’t regulate interstate commerce.  This doctrine is referred to as the Dormant Commerce Clause.

So when a state tries to tax interstate commerce conducted over the Internet, is may be improperly violating the Dormant Commerce Clause.  The court will deem a tax to be constitutional if the tax:

1. is applied to an activity with a substantial nexus with the taxing State
2. is fairly apportioned
3. does not discriminate against interstate commerce, and
4. is fairly related to the services provided by the State.”

As the Court in Quill v. Heitkamp explains, to meet the nexus requirement under the Commerce Clause, the seller must have some type of physical presence in the state.  In Quill, where the seller’s only connection to the state was through mail catalogs, there wasn’t a sufficient nexus.  

The Supreme Court in Quill made it clear that Congress could always pass legislation allowing states to tax interstate sales.  This to me makes it very unlikely that the Court would broadly interpret this bright line rule of requiring a physical presence–there would be no need to–if Congress doesn’t like the rule, it can repeal it.  Granted though, some states will get cute in arguing what constitutes a physical presence.

In Quill, the Court also rejected a “slightest presence standard of constitutional nexus.”  In other words, some minor physical connection won’t suffice–in Quill, the seller had some diskettes that were physically present in the state.

Amazon is suing NY over its Internet sales tax, arguing that it is unconstitutional.  If North Carolina does move forward with taxing interstate Internet sales, a lawsuit almost certainly would follow.  The odds are very good that the state would lose the case.