Tuesday, March 24, 2015
HMB's Jordan Goodman in Law360 Comments on Justice Kennedy's
Opinion Calling for Re-evaluation of Quill
"Retailers Say High Court Use Tax Action Is
By Ama Sarfo
Law360, March 23, 2015
The brick-and-mortar retail
industry is grateful that Justice Anthony Kennedy wants the
U.S. Supreme Court to revisit two long-standing
rulings that bar states from collecting use taxes from Internet
sellers and other remote vendors, but the lobby says the best
outcome will come from Congress.
Earlier this month, the high court addressed a tiny part of the
battle when it ruled that taxpayers can challenge state use tax
notice and reporting requirements in federal court. And in a lone
concurrence, Justice Kennedy used the ruling as an opportunity to
heavily criticize the Supreme Court's use tax doctrine, which he
says is depressing state revenues...
Justice Kennedy...pointed out that when the high court decided a
key use tax case, Quill Corp. v. North
Dakota, the Internet was in its infancy, and
mail-order sales in the U.S. were $180 billion, a paltry amount
compared to the $3.16 trillion in U.S. e-commerce sales that
occurred in 2008.
Now, states can't collect much-needed revenue from online and
remote-seller transactions because of the Supreme Court's rulings
in Quill and an earlier case, National Bellas Hess Inc.
v. Department of Revenue of Illinois, Justice Kennedy
And he argues that the technological sea change obligates the
court to revisit Quill and Bellas Hess.
Justice Kennedy's call [to action] may not be a literal one, says
Goodman, head of Horwood Marcus & Berk
Chtd.'s state and local tax practice.
"I don't think Justice Kennedy really wants another Quill-type
case to come before the Supreme Court ... I think this was a
motivational ploy by Kennedy to have Congress act," Goodman said.
"Coaches do this a lot when a star isn't performing up to standards
- by threatening that another player could take their place as
...Justice Kennedy's concurrence is further undermined by the fact
that the high court has declined other opportunities to hear other
remote seller litigation cases.
"Justice Kennedy is saying the justices have the ability to
legislate from the Supreme Court, but I don't think the court wants
to do that. They had an opportunity when the Overstock and Amazon
[click-through nexus] cases went up from the New York courts,"
Goodman added. "Although the cases focused on an agency theory, the
Supreme Court could have addressed physical presence in those
cases, and they chose not to."
The full article is available on
Copyright 2015 Portfolio