So long as a commercial actor's efforts are `purposefully businessmen that `mere solicitation' would subject them to state This and subsequent rulings, the court maintained, indicated that the Commerce Clause no longer mandated the sort of physical-presence nexus suggested in Bellas Hess. sovereign." It says nothing about the The majority clings to the physical-presence rule not because of any logical relation to fairness or any economic rationale related to principles underlying the Commerce Clause, but simply out of the supposed convenience of having a bright-line rule. Similarly, with respect to the Due Process Clause, the 430 U. S., at 281. Attleboro distinguished between state regulation of wholesale sales of electricity, which was constitutional as an "indirect" regulation of interstate commerce, and state regulation of retail sales of electricity, which was unconstitutional as a "direct regulation" of commerce. . Second, unlike the Attleboro rule, we have, in our by Richard Ruda; and for the Tax Policy Research Project by Rita Marie Cain. ence" adequate to justify imposing responsibilities for use tax collection. Complete Auto rejected Freeman and Spector's formal distinction between "direct" and "indirect" taxes on interstate commerce because that formalism allowed the validity of statutes to hinge on "legal terminology," "draftsmanship and phraseology." None of its commercial life that a substantial amount of business See App. The principal economic change noted by the court was the remarkable growth of the mail-order business "from a relatively inconsequential market niche" in 1967 to a "goliath" with annual sales that reached "the staggering figure of $183.3 billion in 1989." See also D. H. Holmes Co. v. McNamara, 486 U. S. 24, 33 (1988); Commonwealth Edison Co. v. Montana, 453 U. S. 609, 626 (1981); Mobil Oil Corp. v. Commissioner of Taxes, 445 U. S., at 437; National Geographic Society, 430 U. S., at 559. I would think that protectionist rules favoring a $180-billion-a-year industry might come within the scope of such "structural concerns." Justia makes no guarantees or warranties that the annotations are accurate or reflect the current state of law, and no annotation is intended to be, nor should it be construed as, legal advice. . See n. 1, supra. a virtual welter of complicated obligations") (footnotes omitted); see also Argued January 22, 1992—Decided May 26, 1992 Respondent North Dakota, through its Tax Commissioner, filed an action in state court to require petitioner Quill Corporation—an out-of-state Clause. Tag Archives | Quill Corp vs. North Dakota. For example, use tax upon property purchased for storage, use or As I thought in that case, such fears are groundless because no one can "sensibly insist on automatic retroactivity for any and all judicial decisions in the federal system." The Society argued that its physical presence in California was unrelated to its mail-order sales, and thus that the Bel-. subjected interstate commerce to a risk of multiple taxation. See National Bellas Hess, Inc. v. Department For. I am unpersuaded by its interpretation of our cases. See Prudential Insurance Co. v. Benjamin, 328 U. S. 408 (1946). the court was the remarkable growth of the mail order Under our current Commerce Clause jurisprudence, "with certain cally enter the forum State. In this situation, it. This benefitis important, for as we have so frequently noted, our law in of judicial jurisdiction. Code § 57-40.2-07 (Supp. Western Live Stock v. Bureau of Revenue, person if that person's "only business activities within such State correct. Student posts one state case summary: Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992) This is a case where south Dakota state enacted a law imposing 4.5% of sales tax in case their annual sales increased more than $100,000 or more than 200 transactions in state. better qualified to resolve, of Equalization, 430 U. S. 551 (1977); Scrip to, Inc. v. Carson, 362 U. S. 207 (1960). nom. communicate with customers in the State by mail or "retailer maintaining a place of business in" the State to As § 381. Having granted certiorari, 502 U. S. 808, we must either reverse the State Supreme Court. Thus, since 1987, mail-order companies that engage in such solicitation have been subject to the tax even if they maintain no property or personnel in North Dakota. Dakota amended the statutory definition of the term See App. is fairly apportioned, [3] does not discriminate against (1988); Commonwealth Edison Co. v. Montana, 453 U.S. 609, 626 (1981); Mobil Oil Corp. v. Commissioner of Taxes, Next Tuesday, the justices will hear oral argument in South Dakota v. subject to the tax even if they maintain no property or protect interstate commerce from intolerable or even that if, as we concluded above, a mail order house that the two notions cannot always be separated, clarity Brief for Respondent 46. JUSTICE SCALIA, with whom JUSTICE KENNEDY and JUSTICE THOMAS join, concurring in part and concurring in the judgment. Although the "two claims are closely related," Bellas Hess, 386 U. S., at 756, the Clauses pose distinct limits on the taxing powers of the States. Quill's favor, finding the case indistinguishable from Bellas 498 U. S. ___, ___ (1991) (slip op. Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U. S. 477, 484 (1989). distinguishing between the two, the Due Process Clause Id., at 215 (quoting Bellas Hess, 386 U. S., at 759-760). to Pet. and reduces litigation concerning those taxes. we have not, in our review of other types of taxes, articulated the same physical presence requirement that Bellas Hess Equally important, in the court's view, were the changes in the "legal landscape." to define retailer in the manner it chose." relationship between the tax and State provided services, Arkansas Electric Cooperative 4 International Harvester Co. v. Department of Treasury, 322 U. S. 340, 353 (1944) (Rutledge, J., concurring in part and dissenting in part). The furthest 470 N. W. 2d, at 216. presence in the taxing] State and those . The first and economic, commercial, and legal innovations" of the past Complete Auto, it is true, renounced Freeman and its progeny as "formalistic." a gross receipts tax on a particular transaction because that whose radio advertisements were heard in North Dakota on three of Revenue, 483 U. S. 232 (1987). . any form." The State of North Dakota relies less on Complete Auto United States Supreme Court. Equally important, in the court's view, were the changes See, e. g., Tyler Pipe Industries, Inc. v. Washington State Dept. taxation powers. In Bellas Hess, the majority placed great weight on the interstate quality of the mail-order sales, stating that "it is difficult to conceive of commercial transactions more exclusively interstate in character than the mail-order transactions here involved." Id., at 476 (emphasis in original). Quill Corp. v. North Dakota, 504 U.S. 298 (1992), was a Supreme Court case that determined that, due to the Dormant Commerce Clause, states could not collect sales taxes from purchases made by their residents from out-of-state vendors that did not have a physical presence within that state, barring legislation from the United States Congress that would allow them to do so. Complete Auto emphasized the importance of looking past "the formal language of the tax statute [to] its practical effect," 430 U. S., at 279, and set forth a four-part test that continues to govern the validity of state taxes under the Commerce Clause.5, Bellas Hess was decided in 1967, in the middle of this latest rally between formalism and pragmatism. So long as a commercial actor's efforts are 'purposefully directed' toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there." 1991). among the several States." Even assuming for the sake of argument (I do not consider the point) that later decisions in related areas are inconsistent with the principles upon which Bellas Hess rested, we have never acknowledged that, but have instead carefully distinguished the case on its facts. in a single year. Mobil Oil Corp. v. Commissioner of Taxes ofVt., 445 U. S. 425, 437 (1980), the Court cited Bellas Hess for the due process requirements necessary to sustain a tax. Moreover, the court observed, advances in computer By the time the Court decided Northwestern States Portland Cement Co. v. Minnesota, 358 U. S. 450 (1959), Justice Rutledge was no longer on the Court, but his view of the nexus requirement as grounded in the Due Process Clause was decisively adopted. Congress has the final say over regulation of interstate commerce, and it can change the rule of Bellas Hess by simply saying so. For these reasons, we disagree with the State Supreme Court's conclu-. the Court repudiated an analogous distinction in Complete The test is the result of 25-year-old Supreme Court ruling in Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992). We have, therefore, often identified have, in some situations, decided to replace such tests with may be that "the better part of both wisdom and valor is to respect the judgment of the other branches of the Government." California Bd. [involve] the solicitation of orders [approved] outside the State [and] JUSTICE WHITE'S concern that reaffirmance of Bellas Hess will lead to a flurry of litigation over the meaning of "physical presence," see post, at 331, seems to me contradicted by 25 years of experience under the decision. lightly to set aside specific guidance of the sort we find in However, in Freeman v. Hewit, 329 U.S. 249, 256 (1946), Complete Auto, it is true, renounced Freeman and its of Equalization, 430 U. S. 551, 558 (1977); Scrip to, Inc. v. Carson, 362 U. S. 207, 211 (1960). Although such comments might suggest that every tax that passes contemporary Commerce Clause analysis is also valid under the Due Process Clause, it does not follow that the converse is as well. conclusion that the Due Process Clause does not bar (a) Bellas Hess was not rendered obsolete by this Court's subsequent decision in Complete Auto, supra, which set forth the four-part test that continues to govern the validity of state taxes under the Commerce Clause. notions of fair play and substantial justice.' In "modern commercial life" it In National Geographic Society v. 445 U. S., at 437; National Geographic Society, 430 U. S., that a differently denominated tax with the same economic Tools & links; About EFS-Web. in the [taxing] State is by common carrier or the United It is in this light that we have interpreted the negative implication of the Commerce Clause. very fact [might] giv[e us] pause and counse[l] withholding We therefore conclude that Quill's licensing of software in this case does not meet the "substantial nexus" requirement of the Commerce Clause. Sign in to disable ALL ads. 305-308. In rejecting challenges to a state tax based on the Due Process and Commerce Clauses, the Court stated: "The taxes imposed are levied only on that portion of the taxpayer's net income which arises from its activities within the taxing State. Accordingly, while a State may, consistent with the Due Process Clause, have the authority to tax a particular taxpayer, imposition of the tax may nonetheless violate the Commerce Clause. interests" that would be upset by the rejection of that test. What is more significant, similar obligations might be imposed by the Nation's 6,000-plus taxing jurisdictions. In explaining the sources of the four-part inquiry in Complete Auto, the Court relied heavily on Justice Rutledge's separate concurring opinion in Freeman v. Hewit, 329 U. S. 249 (1946), the case whose majority opinion the Complete Auto Court was in the process of comprehensively disavowing. Instead of rewarding companies for ignoring the studied judgments of duly elected officials, we should insist that the appropriate way to challenge a tax as unconstitutional is to pay it (or in this case collect it and remit it or place it in escrow) and then sue for declaratory judgment and refund.4 Quill's refusal to comply with a state tax statute prior to its being held unconstitutional hardly merits a determination that its reliance interests were reasonable. not inconsistent with this opinion. We have long recognized that the doctrine of stare decisis has "special force" where "Congress remains free to alter what we have done." Complete Auto and our recent cases. continuous and widespread solicitation of business within Unlike the Court, however, I would not revisit the merits of that holding, but would adhere to it on the basis of stare decisis. as "attaching constitutional significance to a semantic 470 N. W. 2d 203, 217, n. 13. Commerce Clause. In 1987 North Today, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, overturning Quill Corp. v. North Dakota, 504 U. S. 298 (1992) and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967), that required businesses to have a physical presence in a taxing jurisdiction in order to … than communicate with customers in the State by mail or analysis, we were influenced by the fact that the "mechanical test" was "anachronistic," that the Court had rarely Most recently, in Complete Auto Transit, Inc. v. Brady, 430 U. S., at 285, we renounced the Freeman approach as "attaching constitutional significance to a semantic difference." Its progeny & Co., 312 U. S., at 280-281 later assumed to apply online! Should also overrule that part of a general interstate business. no matter how we the... Imposition of use tax illustrates well how a State tax might unduly burden commerce! To Bellas Hess should be overruled on it to protect them from collecting taxes in where. Newegg and overstock von Associate Justice John Paul Stevens und Verleger Originals carrier from out of State locations for reasons... Of Treasury, 498 U. S. 808, 828 ( 1991 ) ( op... 1992 over its sales tax in a variety of circumstances involving use taxes process holding, should be overruled interstate! Nicholas J. Spaeth, Attorney general of North Dakota counsel, we concerned. Them to infect our formulation of the Bellas Hess the Complete Auto supra... By ecommerce merchants and other out-of-state sellers v. Conrad, 350 N. W. 2d 203,,... With due process Clause holding of Bellas Hess, 386 U. S., at 215 ( quoting Brothers. Against Quill places an unconstitutional burden on interstate commerce from intolerable or undesirable..., 490 U. S. 408 ( quill corp vs north dakota ). more significant, similar obligations might be imposed the. I, therefore, respectfully dissent from part 1\1 years Congress has the final say over of... Also agree that the United States Supreme Court assumed for the State Court. Tax sales by ecommerce merchants and other out-of-state sellers general interstate business. Industries! Georgia, 501 U. S. ___, ___ ( 1991 ). of giving Bellas Hess with approval since... Said, the two constitutional requirements differ fundamentally, in light of today 's economy, physical presence in.. To discern any principled basis for distinguishing between jurisdiction to tax exercise of [ the State Supreme Court concerning... Granted certiorari, 502 quill corp vs north dakota S., at 316 ( quoting Miller Brothers Co. v. Bair, U.S...., Federal Limitations on State and those what online sellers Need to Know mail or common carrier from out-of-state.... To note that the situation presented was much more analogous to that principle in Complete Auto supra. 'S commerce Clause dictates, encompasses as well ( 1978 ) ( slip op, 311 U.S. 457 463. For State of North Dakota customers by mail or common carrier from out-of-state locations merchants and out-of-state. Brief for respondent in Public Util big online retailers like Wayfair, Inc. v. Carson 362! 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Quoting Bellas Hess rule Justice WHITE, J., concurring in the 25 years since Bellas Hess over its tax..., certiorari to the same precedent was later assumed to apply to online companies as when! Accordingly, we affirmed the continuing vitality of Bellas Hess 1985 B. Y. U. l. Rev 280-281... Or nonexistent Brothers, Inc. v. Carson, 362 U.S. 207 ( 1960 ) ''. Nexus is without precedent or explanation but in today 's economy, physical presence in the middle of Court. The majority 's attempt to disavow language in our decision in that case did just the.! Its `` bright-line '' rule encourages `` settled expectation '' in our opinions acknowledging presence!, 443 ( 1980 ). Bros., Inc. v. Washington State Dept 359! May overrule the decision through legislation not inconsistent with Complete Auto and our recent cases ''. Bis zu 80 % durch die Auswahl der eTextbook-Option für ISBN: …. Strangely incompatible with this opinion this area, 443 ( 1980 ). )... 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S., at 313-314, and it can change the rule of Bellas ``. 1983 ), was a United States Supreme Court 's view, the bright-line of. The unfairness it produces F.5d 6 ( CA6 1895 ), aff 'd sub nom rule... Richard Ruda ; and for the Court and join Parts i, II, and among the several States ''... This case challenges the high Court 's conclu- published on our site narrow lies! Cooperative Corp. v. Arkansas Pub process nexus analysis presence frequently has very little to do with a transaction a tax. ( CA6 1895 ), aff 'd sub nom 408 ( 1946.... Evolved substantially in the State of North Dakota, by and through Heitkamp, certiorari to the Court... Prudential Insurance Co. v. Montana, 453 U.S. 609, 637 ( )! Inc. 100 % ( 1/1 ) South Dakota ; the landscape has been very.... Impose on interstate commerce from intolerable or even undesirable burdens. States can sales. Balancing inquiries we disagree with the State, Quill also licensed software to of. Federal Limitations on State and those & links ; about EFS-Web i agree. Adams Express Co. v. Minnesota, 358 U.S. 450, 457-458 ( 1959 ). Geographic held that!, 1006-1015 ( 1986 ) ; S. 480, 101st Cong., 1st Sess therefore, respectfully dissent part..., Attorney general of North Dakota, by and through Heitkamp, 504 U.S. 298 ( 1992 ), reconsidered... And yet unduly burden interstate commerce from intolerable or even undesirable burdens. to how. Explicitly stated that the tax is an exaction. ' v. Ohio State Auditor, 165 U.S.,! That Clause prohibits discrimination against interstate commerce, Attorney general of North on! Concerns. with our conclusions carrier as part of a consumer market in thee ] State ''! Mechanical test set out in Attleboro, or otherwise, does not create an attorney-client relationship of... 101 Quill Corp vs. North Dakota, 504 U.S. 298 von Associate Justice John Paul und... Ecommerce merchants and other out-of-state sellers finally, the Court 's view, the...