The following excerpt is from Paul Williams’ article, “NC Justices Find Wis. Printer On Hook For Sales Tax” published by Law360 on December 16, 2022. Read the full article by Law360 here (subscription required).
In a 6-1 decision, North Carolina’s Supreme Court upheld a sales tax assessment on Wisconsin-based Quad Graphics’ sales into the state, finding the U.S. Supreme Court precedent that would have required use tax to be levied instead was no longer valid.
The North Carolina justices said the U.S. Supreme Court implicitly overruled Dilworth in its 2018 South Dakota v. Wayfair ruling, which allowed states to require out-of-state vendors to collect and remit sales and use taxes. Furthermore, the justices determined Wayfair invalidated the Dilworth test.
Jordan M. Goodman followed the litigation and said, “Because Wayfair and Quad Graphics were sales tax cases, the state’s justices had all the leverage they needed to reverse the lower court.” He added that the practice of form over substance for sales and use taxes “has been eroding” in recent years.
“The court used the substance over form as an ending point and got there by analyzing Wayfair and Complete Auto and whether it overruled Dilworth,” said Jordan.