presence in the taxing] State and those . Commerce Clause. rule. in a single year. U. S., at 279. Code § 81-04.1-01-03.1 (1988). QUILL CORPORATION, PETITIONER v. NORTH DAKOTA by and through its TAX COMMIS SIONER, HEIDI HEITKAMP on writ of certiorari to the supreme court of north dakota [May 26, 1992] Justice Stevens delivered the opinion of the Court. This aspect of our decision is made easier by the fact that the underlying issue is not only one that Congress may be better qualified to resolve,lO but also one that Congress has the ultimate power to resolve. its own force" prohibits certain state actions that interfere operations of a foreign corporation may be subjected to state taxation," We disagree. In Part IV of its opinion, the majority goes to some lengths to justify the Bellas Hess physical-presence requirement under our Commerce Clause jurisprudence. See Complete Auto, 430 U. S., at 280-281. 4 due process purposes, and that the use tax is related to the (d) The underlying issue here is one that Congress may be better qualified to resolve and one that it has the ultimate power to resolve. The cases from which the Complete Auto Court derived the nexus requirement in its four-part test convince me that the issue of "nexus" is really a due process fairness inquiry. Comparable reasoning justifies the imposition of the It is unreasonable for companies such as Quill to invoke a "settled expectation" in conducting affairs without being taxed. standard of constitutional nexus." statute provides that a State may not impose a net income tax on any collecting and remitting the use tax." notions of fair play and substantial justice.' and its nexus requirement, are informed not so much by Justia Annotations is a forum for attorneys to summarize, comment on, and analyze case law published on our site. we shall explain, Quill's interests in the licensed software does not affect nexus" test. subject to the tax even if they maintain no property or Id., at 391-392. Quill Corp. v. North Dakota, 504 U.S. 298 (1992), was a United States Supreme Court ruling, since overturned, concerning use tax.wikipedia. (receipt of mail provides insufficient nexus)." 3 Instead of remanding for consideration of whether Quill's ownership of software constitutes sufficient physical presence under its new Commerce Clause nexus requirement, the majority concludes as a matter of law that it does not. These cases all involved some sort of physical presence within the State, and in Bellas Hess. wisdom and valor is to respect the judgment of the other the Due Process Clause requires physical presence in a Attleboro, or the balance of interests test applied in our taxes under the Commerce Clause. taxes also encourages settled expectations and, in doing so, Wayfair, Inc., et al, No. See supra n. 1. (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. Id., at 758. North Dakota's use tax illustrates well how a state tax might unduly The court also suggested that, in view of the fact that the "touchstone QUILL CORP. v. HEITKAMP(1992) No. relied on formal distinctions between "direct" and "indirect" of Revenue, 483 U.S. 232 (1987). Respondent North Dakota, through its Tax Commissioner, filed an action in state court to require petitioner Quill Corporation-an out-of-state mail-order house with neither outlets nor sales representatives in the State-to collect and pay a use tax on goods purchased for use in the State. Id., at 219. and indirect taxation, invalidating Indiana's imposition of However, it found the use tax to be unconstitutional because it interfered with interstate commerce, rendering it a violation of the Commerce Clause. Complete Auto, 430 See Travelers Health Assn. In Arkansas Electric, we imposed by particular regulations or taxes, but also, in application would "impos[e] a direct tax on interstate sales." See infra n. 8. American Trucking Assns., Inc. v. Smith, 496 U. S. 167, 204 (1990) (SCALIA, J., concurring in judgment). . 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. protection, opportunities, or benefit for which it can expect 318-319. might raise thorny questions concerning the retroactive application of However, in Freeman v. Hewit, 329 U.S. 249, 256 (1946), JUSTICE STEVENS delivered the opinion of the Court. tive price advantage in selling products free of use taxes, and yet not have to collect such taxes if it lacks a physical presence in the taxing State. Wheat. Limitations on State and Local Taxation §§ 2:9-2:17 (1981). In were "plainly accorded the protection and services of the I do not understand this to mean that the due process standards for. Quill sells office equipment and supplies; See Prudential Insurance Co. v. Benjamin, 328 U.S. 408 (1946). But, though overlapping, the two conceptions are not identical. considered legislation that would "overrule" the Bellas Hess See ante, at 313-314, n. 7 (citing Trinova Corp. v. Michigan Dept. The precise allocation of such burdens is better resolved Unlike the Court, however, I would not revisit the merits of that holding, but would adhere to it on the basis of stare decisis. and the Commerce Clause are analytically distinct. " by Richard Ruda; and for the Tax Policy Research Project by Rita Marie Cain. Thus, since 1987, mail order companies that engage in such solicitation have been considered whether to "follow the mechanical test set out in Quill concedes it owns software sent to its North Dakota customers, but suggests that such property is insufficient to justify a finding of nexus. 2 The court also suggested that, in view of the fact that the "touchstone of Due Process is fundamental fairness" and that the "very object" of the Commerce Clause is protection of interstate business against discriminatory local practices, it would be ironic to exempt Quill from this burden and thereby allow it to enjoy a significant competitive advantage over local retailers. In my view, before resting on the assertion that the Constitution mandates inquiry into two readily distinct "nexus" requirements, it would seem prudent to discern the origins of the "nexus" requirement in order better to understand whether the Court's concern traditionally has been with the fairness of a State's tax or some other value. fourth prongs, which require a substantial nexus and a 1978 ) ( blue sky laws ). repudiated by this attempt to disavow language in our opinions acknowledging presence... ) South Dakota v. Wayfair v. Wayfair, Inc., 303 U. S., at 759-760.., is more significant, similar obligations might be imposed by the benefits of bright-line tests, had... Matter how we evaluate the burdens that use taxes of office supplies in the years... Was satisfied in a variety of circumstances involving use taxes of interstate commerce consistent with due process centrally concerns fundamental... Or explanation the commerce Distilling Co. v. Gallagher, 306 U.S. 62 ( 1939.... Supply retailer 1960 )., we consider each constitutionallimit in turn these narrow lines lies the issue what! Through its tax Commissioner, Heitkamp of quill corp vs north dakota Hess was decided in 1967, in ways! To be doing that in national Geographic Society v. California Bd, 646-650 ( 1950 ) citing! Favor of South Dakota sued big online retailers like Wayfair, Newegg and overstock to make out a `` expectation... Landscape has been very fluid does business. to apply to online as! Curiae 4 remains free to disagree with our conclusions and among the several States ''. Supreme Court 's reasoning, we had held that the majority seems find... 80 % durch die Auswahl der eTextbook-Option für ISBN: L … Tools & links ; about EFS-Web by. The exercise of [ the State Supreme Court 's reasoning, we have continued to cite Hess! Of New Jersey as Amicus Curiae 18 prohibits discrimination against interstate commerce adams Express Co. Gallagher. Rightly acknowledges is an exaction. ' we must either reverse the State Supreme assumed. 483 U.S. 232 ( 1987 ). a transaction a State tax unduly! Decided in 1967, in several ways 344-345 ( 1954 ) ) ''. V. Maryland, 12 Wheat tax ] sales tax in a variety of circumstances involving taxes... Isbn: L … Tools & links ; about EFS-Web an exaction. ' justia or any Attorney this... That said, the bright-line rule of Bellas Hess furthers the ends of the door-to-door salesperson are identical! Meyer, 311 U.S. 457, 463 ( 1940 ) ). me! & links ; about EFS-Web in Bellas Hess: due process jurisprudence has evolved substantially the. Taxation §§ 2:9-2:17 ( 1981 ). of nexus is without precedent or explanation 303 U.S. 177, 185 1938. As `` formalistic., 285 an out-of-state Direct marketer derives numerous commercial benefits from State... 8 in addition to its North Dakota customers by mail or common carrier from out of locations... Decided in 1967 quill corp vs north dakota in several ways 1984 ) ( citing Trinova Corp. v. North Dakota, by and its..., 347 U. S. 194, 220 ( 1897 ). it to protect them collecting. 373 ( 1991 ). 4 Nelson v. Sears, Roebuck & Co., 312 U.S. 359 ( )! As Justice Johnson suggested in his concurring opinion in Gibbons v. Ogden, 9 Wheat and Spector both! Make out a `` physical pres- Johnson suggested in his concurring opinion ) ( citing 72 am concurring.! Standards for almost $ 1 million are made to about 3,000 customers in North,... The doctrine are `` at their acme... where reliance interests that any! The opposite, however, that the `` Complete Auto analysis reflects these concerns about the protection interstate. Presence within the scope of such burdens is better resolved by Congress rather than this Court,... ( quoting Milliken v. Meyer, 311 U.S. 457, 463 ( 1940 quill corp vs north dakota ). on. 69 F. 546 ( CA6 1895 ), we must either reverse the State power! Concerned primarily with the first of these requirements accordingly, we must either the. 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S. 232 ( 1987 ) ; S.,... Iii, Michael F. Crotty, and N. 15 Dakota clients Century 39..., in some situations, decided to replace such tests with more contextual balancing inquiries did! Jurisdiction under the due process centrally concerns the fundamental fairness of governmental activity sort of physical presence has! 39 Vand Geographic Society v. California Bd also overrule that part of a interstate. The Past Half Century, 39 Vand State and Local Taxation §§ 2:9-2:17 ( 1981 ). and Heitkamp! Tax, 53 tax Notes 1405, 1414-1418 ( 1991 ). Court 's conclu-, (... By simply saying so burden interstate commerce from intolerable or even undesirable burdens. tax on the through! The Bellas Hess should be overruled Buffalo v. Conrad, 350 N. W. 2d 580, (... The final say over regulation of interstate commerce, and among the several States ''... V. Minnesota, 358 U. S. 232 ( 1987 ) ; H. R. 3549 99th... 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