Wednesday, July 01, 2015
HMB's Jordan Goodman Quoted in Tax Analysts on Challenges
Surrounding Adapting Nexus Laws to a Changing Economy
"Experts on Nexus Issues: The Ball Is in Congress's Court"
Tax Analysts, July 1, 2015
Speaking at the Institute for
Professionals in Taxation's 2015 annual conference in San Diego
June 29, Jordan
Goodman of Horwood Marcus &
Berk Chtd. said that Justice Anthony M. Kennedy's
concurrence in Direct Marketing Ass'n v. Brohl 2015 STT
42-10: Court Opinions calling for a challenge to
Quill's physical presence nexus standard should
signal to Congress that it needs to speak on the issue.
As states vary their sales tax nexus laws to
adapt to a changing economy, Kennedy is warning Congress that if it
does not act soon, the Court will, Goodman said. He characterized
Kennedy's message as saying, "Congress, get your butts in gear,
don't make us decide."
The Direct Marketing Association challenged
Colorado's use tax notice and reporting requirements imposed on
out-of-state sellers that do not have sales tax
nexus because they lack a physical presence in the state. The case
went to the U.S. Supreme Court when the Tenth Circuit declined to
hear the case based on the Tax Injunction Act. The Supreme Court
held March 3 that the case could proceed in federal court.
Now that the case is back at the Tenth Circuit on the merits,
Goodman said that the Colorado reporting statute is problematic.
"How do they enforce it?" he said. "They're going to penalize you,
and they're using the threat of a penalty to make you perform a
behavior that you're not arguably required to perform."
...Goodman...said that with states
and Congress considering sourcing laws, the taxation landscape is
almost certain to change.
"Don't be tied to your historic methodology used to determine
where sales are sourced, particularly [tangible personal property],
because the world is changing, and changing rapidly," Goodman
Copyright 2015 Tax Analysts.
Reprinted with permission.