Quill Background and Outline
US Supreme Court Will Review its 1992 decision in Quill.
Against the backdrop of current revenue concerns by state legislatures over the negative impact on state tax revenues of recent federal income tax legislation, the states have focused their attention on the US Supreme Court with respect to another state revenue source—sales and use taxes. The US Supreme Court is soon to decide in the case of South Dakota v. Wayfair, Inc., whether to reconsider its controversial ruling in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), on whether states may tax online retailers without a physical presence within their borders (cert. granted 1/12/2018, No. 17-494).
The South Dakota law that is at issue is S.B. 106, effective May 1, 2016, which provides that any entity exceeding an annual sales threshold of $100,000 or 200 separate transactions in South Dakota collect and remit South Dakota sales tax. This is often referred to as “economic nexus” rather than “physical presence nexus”. Other states have legislated other “approaches” to nexus, including so-called “click-through”, “Amazon affiliate” and/or “attributional” nexus statutes in order to address the Constitutionally required “sufficient connection” (nexus) that meets both the commerce and due process clauses.
Not only is this case of great interest to the states, but taxpayers in the US and abroad, as well as their practitioners, could face increased future sales and use tax liabilities that would require significant operational (e.g., registration, taxability rules and rates, exemption certificates) and provisioning changes. Non-US companies who in the past did not pay much attention to US sales and use tax liability may find themselves with new administrative burdens that may not work at all like the value-added tax (VAT) with which most non-US companies deal on a regular basis. If the Court does not reverse or otherwise materially change or distinguish its holding in Quill, it might then be up to Congress to legislate any changes. In the past, there have been attempts to draft federal legislation, two examples of which are discussed below. However, it is not clear what action, if any, would take place in the legislative environment of 2018 and beyond.
Until now, the Court had not taken up an opportunity to review Quill, even though, in the Appeals Court, Justice Anthony Kennedy had noted that “there is a powerful case to be made that a retailer doing extensive business within a state has a sufficiently ‘substantial nexus’ to justify imposing some minor tax-collection duty, even if that business is done through mail or the internet,” and recommended “it is unwise to delay any longer a reconsideration of the [Supreme] Court’s holding in Quill.”
Colorado and Ohio earlier sought to have the Supreme Court review the ruling, but such requests were rejected. And many states have drafted legislation similar to the South Dakota legislation and would be able to be quickly implemented in many states, depending upon the specifics of the Supreme Court decisions.
The Retail Industry Leaders Association (RILA) said, if granted, the case would give the Court an opportunity to “end the unfair economic advantage that Quill gives to online-only retailers.” RILA General Counsel and Retail Litigation Center President Deborah White said: “Retailers have supported this case since the beginning, and still believe it is the right case to correct the constitutional course set more than 50 years ago – well before the advent of e-commerce – that today gives online-only retailers an unfair commercial advantage at the expense of local retailers.”
Brief Chronology of Key Legal Events
- On March 22, 2016, South Dakota enacted S.B. 106, effective May 1, 2016, which provides that any entity exceeding an annual sales threshold of $100,000 or 200 separate transactions in South Dakota collect and remit South Dakota sales tax. It was passed with the intention to challenge the US Supreme Court’s physical presence decisions. The law allows the state to quickly initiate court proceedings to address the constitutional validity of the collection and remittance requirements.
- On April 28, 2016, South Dakota filed a declaratory judgment action against ‘remote sellers’ with no physical presence in the state. South Dakota sought a determination that it may require the remote sellers to collect and remit sales tax.
- On March 6, 2017, the South Dakota Sixth Judicial Circuit Court ruled in favor of the defendants and granted their motion for summary judgement. The court found that because the defendants lack a physical presence in South Dakota, a requirement established under Quill, the state is prohibited from imposing sales tax collection and remittance obligations. The court further stated that S.B. 106 fails as a matter of law to satisfy the physical presence requirement that remains applicable to state sales and use tax taxes under Quill and its application of the Commerce Clause. The court ruled that the state is enjoined from enforcing the sales tax economic nexus provisions.
- On March 8, 2017, South Dakota filed a Notice of Appeal requesting the Supreme Court of South Dakota to reconsider the March 6th Order Granting Defendants’ Summary Judgment.
- On September 13, 2017, the Supreme Court of the State of South Dakota upheld the lower court’s holding that the state cannot force remote retailers to collect and remit sales tax if they do not have nexus in South Dakota. (South Dakota v. Wayfair, Inc., South Dakota Supreme Court, No. 28160, September 13, 2017)
- On October 2, 2017, SD Attorney General Marty Jackley filed a petition for certiorari, asking the United States Supreme Court to review the South Dakota Supreme Court decision in State of South Dakota v. Wayfair, Overstock and Newegg. The State asked the U.S. Supreme Court to overrule Quill’s physical-presence requirement, which currently prevents the State from requiring out-of-state retailers to remit taxes for sales made within South Dakota. According to Jackley, “The retail landscape significantly changed with the inception of the internet and access to online shopping. Federal law currently shields out-of-state businesses from remitting the same taxes as South Dakota businesses. Today the State asks the U.S. Supreme Court to level the playing field.”
- Between October-December 2017, many amicus briefs were filed (see below).
- On January 12, 2018, the US Supreme Court announced that it will grant certiorari in the case South Dakota v Wayfair (No. 17-494).
Here is a list of amicus briefs filed on this case:
Oct 19, 2017 Blanket Consent filed by Respondents, Wayfair, Inc., et al., et al.
Oct 23, 2017 Brief amicus curiae of National Association of Wholesaler-Distributors filed.
Nov 01, 2017 Brief amicus curiae of Retail Litigation Center, Inc. filed.
Nov 01, 2017 Brief amicus curiae of National Retail Federation filed.
Nov 01, 2017 Brief amicus curiae of South Dakota Retailers Association filed.
Nov 02, 2017 Brief amicus curiae of Tax Foundation filed.
Nov 02, 2017 Brief amicus curiae of Streamlined Sales Tax Governing Board, Inc. filed.
Nov 02, 2017 Brief amicus curiae of American Booksellers Association filed.
Nov 02, 2017 Brief amici curiae of National Governors Association, et al. filed.
Nov 02, 2017 Brief amici curiae of International Council of Shopping Centers, et al. filed.
Nov 02, 2017 Brief amici curiae of American Farm Bureau Federation, et al. filed.
Nov 02, 2017 Brief amici curiae of American Lighting Association, et al. filed.
Nov 02, 2017 Brief amici curiae of Four United States Senators, et al. filed.
Nov 02, 2017 Brief amicus curiae of Multistate Tax Commission filed.
Nov 02, 2017 Brief amici curiae of Colorado and 34 other States, et al. filed.
Nov 02, 2017 Brief amici curiae of Law Professors and Economists filed.
Dec 07, 2017 Brief amicus curiae of National Taxpayers Union Foundation filed.
Dec 07, 2017 Brief amicus curiae of NetChoice filed.
Dec 07, 2017 Brief of respondents Wayfair, Inc., et al., et al. in opposition filed.
Dec 07, 2017 Brief amici curiae of Hon. Representative, Robert W. Goodlatte, et al. filed.
Dec 07, 2017 Brief amicus curiae of Chris Cox, Former Member of Congress and Co-Author of the Internet Tax Freedom Act filed.
Dec 07, 2017 Brief amicus curiae of American Catalog Mailers Association filed.
Dec 07, 2017 Brief amicus curiae of Americans for Tax Reform filed.
Dec 20, 2017 DISTRIBUTED for Conference of 1/5/2018.
Dec 20, 2017 Reply of petitioner South Dakota filed. (Distributed)
Jan 08, 2018 DISTRIBUTED for Conference of 1/12/2018.
Congressional lawmakers particularly active in the area include: Heidi Heitkamp, Senator from North Dakota; Lamar Alexander, Senator from Tennessee; Richard Durbin, Senator from Illinois; Michael Enzi, Senator from Wyoming; and Kristi Noem, Representative from South Dakota.
The 34 other states filing amicus briefs include:
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
Other State Legislation
Many other states, including Alabama, Wyoming and Tennessee, have similar sales tax “economic nexus” provisions that directly refute the physical presence requirement.
States with “kill-quill” actions
- South Dakota
- Vermont—HB 873(2016) signed 5/25/2016
- Tennessee—Regulation—Rule Sec. 1320-05-01-.129
- Indiana—HB 1129, 4/28/17
- Maine—LD 1405 (2017) 6/21/17
- Mass—(Regulations) Dir 17-2
- North Dakota—SB 2298(2017) 4/10/17
- Wyoming—HB 19 (2017) Signed 4/1/17
Various State Approaches to “Getting around” the Quill standard
The States have taken many different approaches to “getting around” the Quill standard of physical presence. Here are some of them.
So-called Click-through nexus
In the 2012 CRS Report—Amazon Laws and Taxation of Internet Sales: Constitutional Analysis, so-called “Click-through nexus is described as an individual or business that operates a website who places a link on that website that directs Internet users to a different website that offers products or services from an online retailer such as Amazon. For example, in Amazon’s program, these “associate” individuals or businesses receive, as compensation for their referral, a percentage of the income Amazon realizes when an Internet user “clicks through” from one of these links and purchases Amazon goods and services.
“Click-through nexus” statutes require an online retailer to collect use taxes on sales to customers located in the taxing state based on the physical presence in that state of the retailer’s “associates.” An example of such a law is the one enacted by New York in 2008 (N.Y. Tax Law §1101(b)(8)(i)(C)(I). (McKinney 2011).
Under the New York statute referenced above, a vendor is defined as including a person who solicits business either: (I) by employees, independent contractors, agents or other representatives; or (II) by distribution of catalogs or other advertising matter, without regard to whether such distribution is the result of regular or systematic solicitation, if such person has some additional connection with the state which satisfies the nexus requirement of the United States constitution; and by this reason makes sales to persons within the state of tangible personal property or services, the use of which is taxed under this law. Some other states have followed the New York example with varying degrees of “success”.
So-called “attributional nexus”
In this type of nexus, the in-state physical presence and activities of an affiliate or unrelated party may be attributed to the out-of-state seller, either by way of a principle of agency-like behavior, i.e., on behalf of, or “making a market” for the sales (See for example the so-called California bookseller cases, Barnes and Noble, Borders).
So-called “economic nexus”
Economic nexus laws take the position that if an out-of-state seller makes sales into the state exceeding a sales or transaction threshold, the out-of-state seller has created nexus with the state, independent of actual physical presence in the state. The current South Dakota case now before the Supreme Court is one of these economic nexus statutes.
Other Variations on a theme
Other variations include so-called “online marketplace providers” (electronic platforms for advertising, ordering, etc.) and “use tax notice and reporting requirements” (notifying buyers of their obligation to report sale and use tax to the authorities).
Quick Review of the Quill Decision—Physical Presence
In anticipation of the Court’s upcoming review of its Quill decision, it is useful to briefly review the case history on nexus. For this purpose, again the 2012 CRS Report—Amazon Laws and Taxation of Internet Sales: Constitutional Analysis, is constructive:
The first time the Court articulated the physical presence requirement, in the 1967 decision National Bellas Hess v. Dept. of Revenue of Illinois (386 U.S. 753 (1967)), it grounded the requirement in both the Due Process and Commerce Clauses. The Court noted that each required a similar connection between the state and seller liable for the tax: due process required that “the state has given anything for which it can ask return,” while state taxes on interstate commercial transactions were permissible when they represented “a fair share of the cost of the local government whose protection [the seller] enjoys.” The Court held these requirements meant that a state’s authority to impose tax collection responsibility was limited to when the merchant had a physical presence in the state. The Court also noted that due to the significant number of taxing jurisdictions across the country and the complexity of their administrative and collection requirements, the imposition of the tax liability would create an unacceptable burden on interstate commerce.
By the late 1980s, it seemed possible that physical presence was no longer the rule because the Court had modified its analysis of both the Due Process and Commerce Clauses (See for example, Burger King v. Rudzewicz, 471 U.S. 462 (1985)). First, due process was no longer interpreted to require an individual or entity’s physical presence in a state before a state could exercise authority over the individual or entity; instead, liability could be imposed when the individual or entity intentionally made a sufficient level of contact with the state. Second, the Court, rather than enforcing bright-line prohibitions against certain types of taxation on interstate commerce, developed a test to determine whether a tax placed an unacceptable burden on interstate commerce (See Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977)). Since one reason the use tax responsibility was unconstitutional was due to its burdensomeness, it was possible that technological advances had reduced the complexity of collecting the taxes to an acceptable level under the new test.
However, in the 1992 case Quill v. North Dakota, the Supreme Court rejected the idea that physical presence was no longer required and held that a state could still not impose use tax collection liability under the dormant Commerce Clause on a mail-order seller without a physical presence in the state, absent congressional action. While the Court affirmed the holding in Bellas Hess, it did not entirely adopt the same rationale. As in Bellas Hess, the Court found that collecting the tax would be an impermissible burden on interstate commerce, absent congressional action, and again noted the magnitude of the potential burden of such tax in light of the numerous taxing jurisdictions across the country. The Court, however, altered its reasoning from Bellas Hess by expressly rejecting the idea that due process requires physical presence. The Court, noting that the two clauses served different purposes, found that its due process analysis had evolved so that physical presence was not necessary so long as the seller had directed some actions at the state’s residents. The Court found such purposeful contact existed in Quill since the seller had “continuous and widespread solicitation of business” within the state.
It should be instructive to track the Courts 2018 review of South Dakota v. Wayfair, Inc., in the context of its reasoning in Quill, as summarized above.
Federal Attempts at a Solution
If the Court does not reverse its position on Quill, greater attention will then turn to potential federal tax legislation. Congress has thus far not defined the nexus standard, although legislation to do so had been introduced in the 112th Congress, the most relevant of which was the Marketplace Fairness Act (S. 1832). Similar legislation had been introduced in prior Congresses.
In May 2013, the Senate, along with support of the states and retailers, passed the Marketplace Fairness Act (MFA) (S. 743), referenced above. That act would have required states to simplify their sales and use tax collection and reporting systems if they wished to impose a collection obligation on sellers over a certain size. No further action was taken on it.
More recently, in 2016, the House Judiciary Chairman Goodlatte (R-VA) released a discussion draft of The Online Sales Simplification Act of 2016 (Act or OSSA). The Act adopts a so-called “hybrid-origin” (seller) approach, rather than a “destination” (buyer) approach for collecting, remitting and reporting remote sales tax on products and services, including guidelines and restrictions on states that do not impose a sales tax and do not participate in a statutory state tax clearinghouse established by participating states.
So, although in the interim, many efforts to legislate the problem have been proposed, it may be instructive to review at least the two proposals referenced above, OSSA and MFA, in more detail to provide concrete examples of the complexities associated with a federal solution to a state tax problem. An important distinction is their differing approaches to the state sourcing rule. The OSSA is oriented toward “state of origin” of the sale or service, and the MTC is “state of destination” of the sale or service. With respect to OSSA and MFA, the Multistate Tax Commission (MTC) provided an overview and analysis in which it identified what it sees as problems with these federal attempts to provide a solution. See below for a brief summary.
OSSA Draft Legislation — “origin (or hybrid)-based” legislation
A State may impose a sale, use or similar tax on a seller, or impose an obligation to collect such a tax imposed on a purchaser, with respect to a remote sale of a product or service only if:
- The State is the origin state for the remote sale;
- The tax is applied using the origin State’s tax base applicable to non-remote sales; and
- The State participates in the State tax clearinghouse
The tax imposed by a State on a remote sale is to be applied at the destination rate unless the destination state does not participate in the clearinghouse, in which case the seller is to apply the tax at the origin rate.
State Tax Clearinghouse
Under the legislation, a State Tax Clearinghouse is established by the participating states for distributing the tax received from remote sellers with respect to remote sales for which the state was the origin State to each State that was a destination State for such sales using a method similar to the clearinghouse operated under the Intermodal Surface Transportation Efficiency Act of 1991 (relating to fuel tax) (P.L. 102-240). Each participating State:
- establishes a single state-wide destination rate to apply to sales by a remote seller to purchasers in the State. These rates will be published annually on July 1;
- determines the amount of sales, use or similar tax paid or collected by remote sellers in that State for remote sales to each other participating State;
Each State not participating in the clearinghouse may not receive any distribution from the clearinghouse. The legislation further specifies a number of rules to effect the purposes of the clearinghouse.
- Destination State—(A) the State in which the product or service sold is received by the buyer, based upon the location indicated by instructions for delivery that the buyer furnishes to the seller; (B) if no delivery location is specified, the State of any address the seller obtains from the buyer during the sale; or (C) if the seller has no address for the buyer, the origin State for the remote sale.
- Destination Rate—the single statewide rate (subject to a specified ceiling) established by the destination State applicable to sales by remote sellers to purchasers in such State.
- Origin State—the State in which the remote seller has physical presence and has employed the greatest average number of employees in the U.S. on business days during the preceding calendar year.
- Origin Rate—the tax rate (including any tax imposed by the tax jurisdiction for the origin locality), subject to the same conditions and exceptions, that would apply were the purchase made in person in the remote seller’s origin State and origin locality.
- Origin Locality—the location in the origin State in which the remote seller has employed the greatest average number of employees on business days during the preceding calendar year.
- Alternate Base—the sales, use or similar tax base determined under the laws of the State in which the remote seller had the most gross receipts the preceding calendar, determined excluding any States that do not impose a sale, use or similar tax, or that lack a physical presence in any State. Special rules apply a “reasonable expectation” test to a remote seller that did not exist through the preceding calendar.
- Remote Sale—a sale made to a purchaser in a State in which the seller has no physical presence.
- Remote Seller—a person that make a remote sale.
- Similar Tax—a tax, whether measured by gross receipts or selling price, imposed with respect to the sale or use of a product or service, regardless of whether the tax is imposed on the seller or the purchaser, with the right or obligation of the seller to obtain reimbursement for the amount of the tax from the purchaser at the time of the transaction.
- State—The several states, District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the U.S.
Origin State and Physical Presence
The Origin State defined above is the State in which the remote seller has physical presence. The term “physical presence”:
- Means that the seller, in a State:
- Owns, holds a leasehold interest in or maintains real property such as a retail store, kiosk, warehouse, distribution center, manufacturing operation, or assembly facility in the State;
- Leases or owns tangible personal property (other than computer software), excluding inventory (other than inventory with a cost value more than $100,000 held for more than 30 consecutive days in a calendar year) in the State;
- Has one or more employees, agents or independent contractors present in the State who engage in specific solicitations toward obtaining product or service orders from customers in that State, or prospective customers in that State, on behalf of the seller, excluding general solicitation campaigns or participation at national or regional trade shows and conventions conducted in the State; or
- Has one or more employees present in the State who provide on-site design, installation, or repair services on behalf of the remote seller;
- Does not include entering into an agreement under which a person, for a commission or other consideration, directly or indirectly refers potential purchasers to a seller outside the State, whether by an Internet-based link or platform, Internet Web site or otherwise;
- Does not include a presence in a State for less than 15 days in a taxable year (or a greater number of days if provided by State law); and
- Does not include delivery and product placement services offered by an in-State common carrier and Internet advertising services provided by in-State residents which are not exclusively directed towards, or do not solicit exclusively, in-State customers.
MTC Comments on OSSA
Some issues Identified by the MTC in OSSA include:
- OSSA does not fully address the problems that it ostensibly seeks to ad-dress.
- OSSA elevates interests of sellers over those of purchasers, creating constitutional questions.
- The definitions of “remote seller,” “remote sale,” and “physical presence” would cause a number of sellers currently collecting tax to fall under this alternative system.
- OSSA creates a greater likelihood of unproductive state competition.
- The draft is likely to create significant administrative problems because it lacks sufficiently specific, unambiguous provisions, and fails to delegate regulatory authority to the clearinghouse.
- Assuming that OSSA would require a state without a sales and use tax to fully participate in the clearinghouse (taking taxes from instate remote sellers and distributing them) in order to avoid having tax imposed on citizens’’ remote purchases (by the “origin state” of the seller of those items), this may constitute unconstitutional commandeering.
It opined additionally that given the issues identified in this analysis, it appears that the potential costs and difficulties in implementing the draft exceed any benefits to the states. Moreover, the draft creates political and constitutional issues that are as great as those it seeks to resolve. The draft’s hybrid-origin-based approach is unworkable even if its drafting problems are fixed.
Marketplace Fairness Act (S. 743) draft legislation— “destination-based legislation
The bill would allow a state to require certain remote sellers to collect sales and use tax on sales made to customers in the state. States that are members of the Streamlined Sales and Use Tax Agreement (SST) would automatically be granted this authority. States that are not SST members would be required to implement simplification requirements. The bill provides an exception for businesses with annual remote sales of $1 million or less.
It would allow a state to require all remote sellers that do not qualify for the small seller exemption to collect tax on all taxable sales sourced to the state. SST member states would be granted this authority beginning 180 days after the state publishes notice of the state’s intent to exercise authority under the Act, but no earlier than the first day of the calendar quarter that is at least 180 days after the enactment of the Act. Non-SST states would receive this authority beginning no earlier than the first day of the calendar quarter that is at least six months after the date that the state enacts legislation to exercise the authority and implements the Act’s mandatory simplification requirements.
Small Seller Exception. A state would not be allowed to require tax collection by a seller that had gross annual receipts in total remote sales in the preceding year of $1 million or less. For purposes of determining whether the small seller exception is met, the sales of all persons related within the meanings of Code Sec. 267(b) and (c) or Code Sec. 707(b)(1) would be aggregated. Persons with one or more ownership relationships would be aggregated if such relationships were designed with a principal purpose of avoiding the application of the Act.
“Remote sale” would mean a sale into a state in which the seller would not be legally required to pay, collect, or remit state or local sales and use taxes unless provided by this legislation.
A state that is not an SST member would be required to enact legislation specifying the tax or taxes to which the authority and minimum simplification requirements apply, and the products and services otherwise subject to those taxes to which the authority does not apply.
Single entity administration. A state would be required to designate:
- a single entity responsible for all state and local sales and use tax administration, return processing, and audits for remote sales sourced to the state;
- a single audit of a remote seller for all state and local taxing jurisdictions within the state; and
- a single sales and use tax return to be used by remote sellers to be filed with the single entity responsible for tax administration.
Remote sellers would not be required to file returns more frequently than non-remote sellers.
Uniform Tax Base. A state would be required to provide a uniform tax base among the state and local taxing jurisdictions within the state.
Taxability Information and Software. A state would have to provide a rate and boundary database and information indicating the taxability of products and services along with any product and service exemptions. Ninety days’ notice of state and local rate changes would be required. The state would also be required to provide remote sellers with free software that calculates sales and use taxes due on each transaction and files returns.
Relief from liability. A state would be required to provide relief from liability to the state or local jurisdictions for the incorrect collection, remittance, or noncollection of tax, including penalties and interest:
- to remote sellers, if the liability is the result of an error or omission by a certified software provider (CSP);
- to CSPs, if the liability is the result of misleading or inaccurate information provided by a remote seller;
- to remote sellers and CSPs if the liability is the result of incorrect information or software provided by the state; and
- to remote sellers and CSPs for collecting tax at the immediately preceding effective rate during the 90-day notice period if the required notice is not provided.
Sourcing of Interstate Sales. SST member states would source remote sale according to the SST’s sourcing provisions. States that are not SST members would be required to adopt the interstate sourcing rules specified in the Act. The rules, which are similar to the SST’s general sourcing rules, provide that remote sales are sourced to the location where the item sold is received by the purchaser, based on the location indicated by delivery instructions provided by the purchaser. If no delivery information is specified, the sale is sourced to the customer’s address that is either known to the seller, or obtained by the seller during the consummation of the transaction, including the address of the customer’s payment instrument if no other address is available. If the address is unknown and a billing address cannot be obtained, the sale is sourced to the address of the seller.
The Act would not be construed as:
- subjecting a seller or other person to franchise, income, occupation, or any types of taxes other than sales and use taxes, affecting the application of such taxes, or enlarging or reducing state authority to impose such taxes;
- creating any nexus between a person and a state or locality;
- encouraging a state to impose sales and use taxes on products or services that were not taxed prior to the enactment of the Act;
- affecting a state’s authority over licensing or interstate commerce; or
- preempting or limiting any power exercised by a state or local jurisdiction.
The provisions of the Act would apply only to remote sales and would not affect intrastate sales or sourcing rules.
Comments by MTC on MFA
According to the MTC, there are alternatives to OSSA. Although the Multistate Tax Commission does not endorse any federal preemption of state tax law, it is important to note that the Marketplace Fairness Act (MFA) uses a workable destination-sourcing system and lacks the numerous drafting and constitutional challenges of this OSSA draft.
There is very little disagreement that at the very least the Supreme Court needed to review the Quill decision, regardless of the outcome. At a minimum, it is hoped that that holding will provide some much-needed clarity or context to the issue, and that such clarity or context will then provide a clearer context for future state and/or federal legislative efforts on the issue. Although no complete planning for such a change can be immediately implemented until the decision is reached, practitioners should begin a vetting of the changes that would have to take place in the operations of their affected clients.