By Andrew M. Ballard
April 5, 2017
Tennessee is the latest hotbed for litigation over the collection and remittance of sales taxes by large online retailers.
Washington-based NetChoice and the American Catalog Mailers Association filed a lawsuit in state chancery court March 30 after an administrative challenge to the state’s new nexus rule, finalized late last year, was rejected ( Am. Catalog Mailers Ass’n v. Tenn. Dep’t of Revenue , Tenn. Ch. Ct., No. 17-307-IV, complaint filed 3/30/17 ).
The groups say the rule ( Tenn. Code Ann. 1320-05-01-.129(2)) is unconstitutional because it contradicts precedent set by the U.S. Supreme Court’s 1992 ruling in Quill Corp. v North Dakota, 504 U.S. 298, which prohibits states from imposing sales and use tax collection obligations on vendors without an in-state physical presence.