Connecticut – U.S. Supreme Court Lets Requirement to Collect Sales Tax on Book Club’s Sales Stand

SALT Report 1788 – The U.S. Supreme Court denied a request to review a decision by the Connecticut Supreme Court that determined that the Missouri-based Scholastic Book Club, Inc. was liable for sales and use tax.  By letting the decision stand, the bookseller is now subject to the same sales tax provisions as Connecticut retailers.

The Connecticut Supreme Court’s decision was based on the fact that nearly 14,000 Connecticut teachers solicit sales, process orders, and deliver books to students on behalf of Scholastic. Although the teachers do not receive any compensation from Scholastic for their work, they are the only avenue for students and their families to receive catalogues, submit orders and payments, and collect the purchased items.  Therefore, the Court ruled that the teachers are acting as in-state representatives of the company and creating nexus as defined in the Commerce Clause.

For Further Information:

Connecticut Department of Revenue – Press Release

U.S. Supreme Court – Docket Number 11-1532

SALT Report 1585 – U.S. Supreme Court to Review Whether Teachers Created Nexus for Mail-Order Bookseller