U.S. Position that Quill Isn't Important Raises Eyebrows

The Supreme Court agreed to hear South Dakota v. Wayfair, Inc., a Constitutional dispute involving Internet Retailers.

The question before the Court is whether a State may force Out-of-State Vendors to Collect Taxes on Sales to its Residents.

I was part of the Quill Case, when I was in the Direct Marketing industry (Catalog Sales), from 1985 till 1998.

The Justices won't be Writing on a Clean Slate.

In prior Decisions, the Court ruled that a State can't Impose Tax-Collection obligations unless a Seller has a Physical Presence within its Borders.

The basic rationale is that without a Physical Presence, there's not a strong enough connection between the Seller and the State.

But the relevant Supreme Court Decisions are Decades old. In a World where Online Selling is easy, fast, and ubiquitous, the Court is now asked to reconsider whether a Physical Presence is always necessary.

The combination of Technological Innovation and changes in Consumer Behavior has allowed Sellers to become more Connected than ever with Customers across the Country.

As Justice Kennedy noted in a recent concurrence, what it means to be "Present" in a State may have taken on a different meaning.

The Nation’s Top Litigator defied Conventional Wisdom Monday when, representing the Official position of the United States, he told the U.S. Supreme Court that Quill Corp. v. North Dakota isn’t really so important in Online Taxation.









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