Multistate – US Supreme Court Rejects Amazon Case

SALT Report 3184 – Big sales and use tax news today.  After gathering on November 26, 2013 the US Supreme Court issued their definitive case load for the coming year today.  Obamacare made the short list (Hobby Lobby).  Amazon did not.  Congress is up with the Marketplace Fairness Act of 2013 (S. 743 Enzi [R-WY]) currently in the House having passed a vote of confidence in the Senate 69 to 27 on May 6, 2013.  Regardless of the acceptance or rejection to hear this case the US Supreme Court has “spoken” loudly with dormant intention articulated in 1967, 1992 and in their current rejection to hear the case.

US Supreme Court Cases – National Bellas Hess 386 U.S. 753 (1967) and Quill 504 U.S. 298 (1992).  Pursuant to both cases the Commerce Clause of the US Constitution is the jurisdiction of congress.

NBH Quote (the very last paragraph in the opinion before reversing the lower court decision)

“The very purpose of the Commerce Clause was to ensure a national economy free from such unjustifiable local entanglements. Under the Constitution, this is a domain where Congress alone has the power of regulation and control.”

Quill Quote (the very last paragraphs in the opinion before reversing the lower court decision)

“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, 10 but also one that Congress has the ultimate power to resolve. No matter how we evaluate the burdens that use taxes impose on interstate commerce, Congress remains free to disagree with our conclusions. See Prudential Insurance Co. v. Benjamin, 328 U.S. 408 (1946). Indeed, in recent years, Congress has considered legislation that would “overrule” the Bellas Hess rule. 11 Its decision not to take action in this direction may, of course, have been dictated by respect for our holding in Bellas Hess that the Due Process Clause prohibits States from imposing such taxes, but today we have put that problem to rest. Accordingly, Congress is now free to decide whether, when, and to what extent the States may burden interstate mail-order concerns with a duty to collect use taxes.

“Indeed, even if we were convinced that Bellas Hess was inconsistent with our Commerce Clause jurisprudence, “this very fact [might] giv[e us] pause and counse[l] withholding our hand, at least for now. Congress has the power to protect interstate commerce from intolerable or even undesirable burdens.” Commonwealth Edison Co. v. Montana, 453 U.S., at 637 (1981) (WHITE, J., concurring). In this situation, it [504 U.S. 298, 319]   may be that “the better part of both wisdom and valor is to respect the judgment of the other branches of the Government.” Id., at 638.”

As states continue to pass various forms of “nexus” legislation, the definition of the term “nexus” will eventually need to be refined, expanded or updated by one of the “branches of the Government.”  Nexus literally means connection and while we continue to drone along our path to streaming ecommerce we convert tangible things to intangible things.  The base of taxation will continue to shift.  Clearly this is a complex issue with many facets operating (See recent decisions in Colorado SR 2900 and Illinois SR 3121). Certainly, we will see more in the future.

 For Further Information:






SR 3158

SR 3121 Illinois

SR 2900 Colorado

National Bellas Hess 386 US 753 (1967)

Quill 504 US 298 (1992)

Marketplace Fairness Act S. 743 Senate Vote #113 May 6, 2013