Quill Corporation v. North Dakota by and Through Its Tax Commissioner, Heidi Heitkamp

Opinion summary

Etalia.ai summary of the majority opinion

In the Quill Corporation v. North Dakota case, the U.S Supreme Court ruled that a business must have a physical presence in a state for that state to require it to collect sales taxes. The court held that under its Commerce Clause jurisprudence, North Dakota could not impose tax collection obligations on an out-of-state mail-order company with no outlets or sales representatives in the state because doing so would unduly burden interstate commerce. This decision was based on two principles: first, states may not use their taxing power in ways that discriminate against interstate commerce; and secondly, they may not subject interstate commerce to undue burdens which are unnecessary for achieving legitimate local interests. However, this ruling has been overruled by South Dakota v Wayfair Inc., 2018 where it was decided physical presence is no longer necessary for collecting sales tax from consumers.

Dissent summary

Etalia.ai summary of the dissenting opinions

In the dissenting opinion for Quill Corporation v. North Dakota, Justice White argued that the physical presence rule established in National Bellas Hess was outdated and should be overruled. He contended that this rule unfairly shielded mail-order businesses from state taxes, thereby giving them a competitive advantage over local businesses which had to pay these taxes. Furthermore, he pointed out that technological advancements have made it easier for companies to do business across state lines without having a physical presence in those states. Therefore, he believed it was unfair to continue exempting such companies from paying sales tax just because they did not have brick-and-mortar stores within a certain jurisdiction. He also disagreed with the majority's assertion that overturning National Bellas Hess would create undue burdens on interstate commerce; instead, he felt this change would level the playing field between different types of retailers.