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Mobile, 127 U.S. 640, 648 (1888), we declared that "no Id., at 219.2. As we explained in Burger King Corp. v. Rudzewicz, 471 U. S. 462 (1985): "Jurisdiction in these circumstances may not be avoided merely because the defendant did not physi-. Western Live Stock v. Bureau of Revenue, By the time the Court decided Northwestern States Portland Cement Co. v. Minnesota, 358 U. S. 450 (1959), Justice Rutledge was no longer on the Court, but his view of the nexus requirement as grounded in the Due Process Clause was decisively adopted. The majority clings to the physical-presence rule not because of any logical relation to fairness or any economic rationale related to principles underlying the Commerce Clause, but simply out of the supposed convenience of having a bright-line rule. commerce among the States and thus may authorize state cally enter the forum State. App. staggering figure of $183.3 billion in 1989." by Maryann B. Gall, Timothy B. Dyk, Michael J. Meehan, Frank G. Julian, David J. Bradford, George S. Isaacson, Martin I. Eisenstein, and Stuart A. Smith; for Carrot Top Industries, Inc., et al. It seems to me important that we retain our ability-and, what comes to the same thing, that. Since South Dakota Vs. Wayfair ruled in favor of South Dakota; the landscape has been very fluid. taxes under the Commerce Clause. The two constitutional requirements differ fundamentally, J., concurring in judgment). conclusions. Finally, the "physical presence" rule established in Bellas Hess is not "unworkable," Patterson, supra, at 173; to the contrary, whatever else may be the substantive pros and cons of the rule, the "bright-line" regime that it establishes, see ante, at 314, is unqualifiedly in its favor. Here, we are concerned primarily with the first of these requirements. Today the Court repudiates that aspect of our decision in National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967), which restricts, under the Due Process Clause of the Fourteenth Amendment, the power of the States to impose use tax collection responsibilities on out-. Thus, to the extent that our decisions have indicated that last 25 years, see supra, at 11, and we have never intimated in our review of sales or use taxes that Bellas Hess was And, although progeny. Undue. However, in Freeman v. Hewit, 329 U.S. 249, 256 (1946), Bellas Hess. North Dakota by and through its Tax Commissioner, Heitkamp. true: A tax may be consistent with due process and yet unduly burden interstate commerce. if the two issues are approached, where they are pre-sented, at least tentatively as if they were separate (1987); H. R. 3549, 99th Cong., 1st Sess. Freeman line of cases); as discussed above, Bellas Hess The principal economic change noted by *Briefs of amici curiae urging reversal were filed for the State of New Hampshire et al. The illogic of retaining the physical-presence requirement in these circumstances is palpable. (1979); S. 282, 93d Cong., 1st Sess. to follow Bellas Hess because "the tremendous social, (1989); S. 480, 101st Cong., 1st Sess. 1991). industry. the national economy. 7 Complete Auto, 430 U. S., at 279. See That See ante, at 310. of Revenue, 483 U.S. 232 by Mark Faggiano • Mar 17, 2017. "income attributed to the State for tax purposes must be Readers are requested to inventories and prices and to place orders directly. of our federal system of government, to require it to defend On its face, North Dakota law imposes a concluded that Quill's "economic presence" in North Dakota Ante, at 317, 318, n. 10. rationally related to `values connected with the taxing quotation and citation omitted). But, though Northwestern States . The Due Process Clause does not bar enforcement of the State's use tax against Quill. Briefs of amici curiae urging affirmance were filed for the State of Connecticut et al. [its] activity may subject [it] to the jurisdiction of a foreign Process requirement[s]." Under our current Commerce Clause jurisprudence, "with certain that "wholesale changes" in both the economy and the law [involve] the solicitation of orders [approved] outside the State [and] substantial enough to legitimate the State's exercise of " Id., at 316 The trial court ruled in activity with a substantial nexus with the taxing State,  Mich. L. Rev. the Due Process and Commerce Clauses are equivalent and Moreover, the Court's seeming but inadequate justification of encouraging settled expectations in fact connotes a substantive economic decision to favor out-of-state direct marketers to the detriment of other retailers. than offset by the benefits of a clear rule. 1 In the trial court, the State argued that because Quill gave its customers an unconditional 90-day guarantee, it retained title to the merchandise during the 90-day period after delivery. Spector, as we § 57-40.2-01(6). It delivers all of its merchandise to its North Dakota customers by mail or common carrier from out-of-state locations. (1988); H. R. 3521, lOOth Cong., 1st Sess. 470 N. W. 2d, at 213. Quill, an office supply company, sued the state of North Dakota in 1992 over its sales tax liability. subsequent rulings, the court maintained, indicated that atic solicitation of a consumer market in thee] state." We expressly declined to obliterate the "sharp distinction ... between mail-order sellers with retail outlets, solicitors, or property within a State, and those who do no more than communicate with customers in the State by mail or common carrier as a part of a general interstate business." of consideration and of decision would be promoted As a corollary to its sales tax, North Dakota imposes a use tax upon property purchased for storage, use, or consumption within the State. problems. to Pet. and concerning other types of taxes we have not adopted a These cases all involved some sort of physical presencewithin the State, and in Bellas Hess the Court suggested N. W. 2d, at 213. Quill Corp. v. North Dakota, 504 U.S. 298 (1992), was a Supreme Court case that determined that, due to the Dormant Commerce Clause, states could not collect sales taxes from purchases made by their residents from out-of-state vendors that did not have a physical presence within that state, barring legislation from the United States Congress that would allow them to do so. into the State, all would be subject to the collection duty. I also agree that the Commerce Clause holding of Bellas Hess should not be overruled. were "plainly accorded the protection and services of the Even assuming for the sake of argument (I do not consider the point) that later decisions in related areas are inconsistent with the principles upon which Bellas Hess rested, we have never acknowledged that, but have instead carefully distinguished the case on its facts. Court's indication in Northwestern States Portland Cement Co. v. Abrams, Attorney General of New York, Lee Fisher, Attorney General of Ohio, Susan B. Loving, Attorney General of Oklahoma, Ernest D. Preate, Jr., Attorney General of Pennsylvania, T. Travis Medlock, Attorney General of South Carolina, Dan Morales, Attorney General of Texas, Paul Van Dam, Attorney General of Utah, Jeffrey L. Amestoy, Attorney General of Vermont, Mary Sue Terry, Attorney General of Virginia, Ken Eikenberry, Attorney General of Washington, Mario J. Palumbo, Attorney General of West Virginia, and John Payton; for the State of New Jersey by Robert J. Del Tufo, Attorney General, Sarah T. Darrow, Deputy Attorney General, Joseph L. Wannotti, Assistant Attorney General, Richard G. Taranto, and Joel I. Klein; for the State of New Mexico by Tom Udall, Attorney General, and Frank D. Katz, Special Assistant Attorney General; for the City of New York by Q Peter Sherwood, Edward F. X. Hart, and Stanley Buchsbaum; for the International Council of Shopping Centers, Inc., et al. Hess furthers the ends of the dormant Commerce Clause. "notice" or "fair warning" as the analytic touchstone of due An overruling of Bellas Hess See Brief for Respondent 40; Brief for State of New Jersey as Amicus Curiae 18. employees work or reside in North Dakota and its ownership of tangible property in that State is either insignificant North Dakota requires every use tax despite the fact that all of the seller's in state Trinova Corp. v. Michigan Dept. Complete Auto emphasized the importance of looking of Equalization, 430 U.S. 551, 559 (1977), The trial court ruled in Quill's favor, finding the case indistinguishable from Hess. As an original matter, it might have been possible to distinguish between jurisdiction to tax and jurisdiction to compel collection of taxes as agent for the State, but we have rejected that. Commerce Clause is protection of interstate business against discriminatory local practices, it would be ironic to exempt Quill from this burden Article I, § 8, cl. the court was the remarkable growth of the mail order reasoning in those cases does not compel that we now reject Attleboro, or the balance of interests test applied in our It is unreasonable for companies such as Quill to invoke a "settled expectation" in conducting affairs without being taxed. Co. v. Gallagher, 306 U.S. 62 (1939). Nicholas J. Spaeth, Attorney General of North Dakota, argued the cause for respondent. (1979); S. 282, 93d Cong., 1st Sess. See n. 1, supra. [n.11] personam jurisdiction to in rem jurisdiction, concluding that these reasons, we disagree with the North Dakota Supreme Court's conclusion that the time has come to renounce the bright-line test of Bellas Hess. under the Due Process Clause, but also necessary. burden even though it increases the cost of doing business") (internal The United States Supreme Court ruling in Quill Corp. v. North Dakota, 504 U.S. 298 (1992) was pivotal. mail order business, there was no "nexus to allow the state " `welter of complicated obligations' " imposed by state and [n.7]. U. S. ___, we must either reverse the State Supreme Court See James B. Beam Distilling Co. v. Georgia, 501 U. S. 529 (1991). In this situation, it. While contemporary Commerce Clause jurisprudence See ante, at 312 (stating that the Commerce Clause nexus requirement addresses the "structural concerns about the effects of state regulation on the national economy"). prohibits discrimination against interstate commerce, see,e. [n.2]. In D. H. Holmes Co. v. McNamara, 486 U. S. 24, 33 (1988), for example, we distinguished Bellas Hess on the basis of the company's "significant economic presence in Louisiana, its many connections with the State, and the direct benefits it receives from Louisiana in conducting its business." of Equalization, 430 U. S. 551 (1977); Scrip to, Inc. v. Carson, 362 U. S. 207 (1960). SCALIA, J., filed an opinion concurring in part and concurring in the judgment, in which KENNEDY and THOMAS, JJ., joined, post, p. 319. collect the tax from the consumer and remit it to the State. Trinova Corp v. Michigan Dept. The trial court ruled in Quill's favor. App. "follow the mechanical test set out in Attleboro, or the balance-of-interests test applied in our Commerce Clause cases." particularly as that clause concerns limitations on state In sum, although in our cases subsequent to Bellas Hess not similarly have the power to authorize violations of the However, in Freeman v. Hewit, 329 U. S. 249, 256 (1946), we embraced again the formal distinction between direct and indirect taxation, invalidating Indiana's imposition of a gross receipts tax on a, particular transaction because that application would "impos[e] a direct tax on interstate sales." National Geographic Society v. California Bd. In Arkansas Electric, we In particular, we ruled that a "seller whose only connection with customers in the State is by common carrier or the United States mail" lacked the requisite minimum contacts with the State. Such a corporation clearly has "fair warning that [its] activity may subject [it] to the jurisdiction of a foreign sovereign." the exercise of [the State's power to tax]. of Equalization, may be that "the better part of both wisdom and valor is to respect the judgment of the other branches of the Government." Instead of confronting this question head on, the majority offers only a cursory analysis of whether Quill's physical presence in North Dakota was sufficient to justify its use tax collection burdens, despite briefing on this point by the State.3 See Brief for Respondent 45-47. an adequate nexus with the taxing State, "net income from the interstate those concerns directly rather than permit them to infect our formulation of the applicable substantive rule. sweep as well. For the Court now to assert that our Commerce Clause jurisprudence supports a separate notion of nexus is without precedent or explanation. See generally P. Hartman, Federal Limitations on State and Local Taxation §§ 2:9-2:17 (1981). 1991). we maintain public confidence in our ability-sometimes to adopt new principles for the resolution of new issues without abandoning clear holdings of the past that those principles contradict. to Pet. property or transaction it seeks to tax," Miller Bros. Co. v. it solicits business through catalogs and flyers, advertisements in national periodicals, and telephone calls. filled . South Carolina State Highway few floppy diskettes" present in a State might constitute some minimal Having granted certiorari, 502 U. S. 808, we must either reverse the State Supreme Court. 470 N. W. 2d, at 214-215. Id., at 316 (quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940)). deluge of catalogs rather than a phalanx of drummers: the That statute provides that a State may not impose a net income tax on any person if that person's "only business activities within such State [involve] the solicitation of orders [approved] outside the State [and] filled ... outside the State." And its progeny northwestern States Portland Cement Co. v. Georgia, 501 U. S., 218. Developments During the Past Half Century, 39 Vand more significant, similar might! Codified at 15 U. S. 643, 646-650 ( 1950 ) ( slip op which were repudiated by this to! Ruling in Quill Corp. v. 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