Business 8th Edition by Marianne Jennings

تمرين 15

Is North Dakota a Taxing State?
Facts
Quill is a Delaware corporation with offices and warehouses in Illinois, California, and Georgia. None of its employees works or lives in North Dakota, and it owns no property in North Dakota.
Quill sells office equipment and supplies; it solicits business through catalogs and flyers, advertisements in national periodicals, and telephone calls. Its annual national sales exceed $200 million, of which almost $1 million are made to about 3,000 customers in North Dakota. The sixth largest vendor of office supplies in the state, it delivers all of its merchandise to its North Dakota customers by mail or common carriers from out-of-state locations.
As a corollary to its sales tax, North Dakota imposes a use tax upon property purchased for storage, use, or consumption within the state. North Dakota requires every "retailer maintaining a place of business in" the state to collect the tax from the consumer and remit it to the state. In 1987, North Dakota amended its statutory definition of the term "retailer" to include "every person who engages in regular or systematic solicitation of a consumer market in th[e] state." State regulations in turn define "regular or systematic solicitation" to mean three or more advertisements within a 12-month period. Thus, since 1987, mail-order companies that engage in such solicitation have been subject to the tax even if they maintain no property or personnel in North Dakota.
Quill has taken the position that North Dakota does not have the power to compel it to collect a use tax from its North Dakota customers. Consequently, the state, through its tax commissioner, filed an action to require Quill to pay taxes (as well as interest and penalties) on all such sales made after July 1, 1987. The trial court ruled in Quill's favor.
The North Dakota Supreme Court reversed, and Quill appealed.
Judicial Opinion
STEVENS, Justice
This case, like National Bellas Hess , Inc. v Department of Revenue of ill , 386 U.S. 753, 87 S.Ct. 1389,18 L.Ed.2d 505 (1967), involves a State's attempt to require an out-of-state mail-order house that has neither outlets nor sales representatives in the State to collect and pay a use tax on goods purchased for use within the State. In Bellas Hess we held that a similar Illinois statute violated the Due Process Clause of the Fourteenth Amendment and created an unconstitutional burden on interstate commerce. 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.
In this case the Supreme Court of North Dakota declined to follow Bellas Hess because "the tremendous social\economic, commercial, and legal innovations" of the past quarter-century have rendered its holding "obsolete]."
As in a number of other cases involving the application of state taxing statutes to out-of-state sellers, our holding in Bellas Hess relied on both the Due Process Clause and the Commerce Clause.
The Due Process Clause "requires some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax," and that the "income attributed to the State for tax purposes must be rationally related to Values connected with the taxing State\" Prior to Bellas Hess , we had held that that requirement was satisfied in a variety of circumstances involving use taxes. For example, the presence of sales personnel in the State, or the maintenance of local retail stores in the State, justified the exercise of that power because the seller's local activities were "plainly accorded the protection and services of the taxing 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."
Our due process jurisprudence has evolved substantially in the 25 years since Bellas Hess , particularly in the area of judicial jurisdiction. Building on the seminal case of International Shoe Co. v Washington , 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), we have framed the relevant inquiry as whether a defendant had minimum contacts with the jurisdiction "such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice." 7
Applying these principles, we have held that if a foreign corporation purposefully avails itself of the benefits of an economic market in the forum State, it may subject itself to the State's in personam jurisdiction even if it has no physical presence in the State.
Comparable reasoning justifies the imposition of the collection duty on a mail-order house that is engaged in continuous and widespread solicitation of business within a State. In "modern commercial life" it matters little that such solicitation is accomplished by a deluge of catalogs rather than a phalanx of drummers: the requirements of due process are met irrespective of a corporation's lack of physical presence in the taxing State. Thus, to the extent that our decisions have indicated that the Due Process Clause requires physical presence in a State for the imposition of duty to collect a use tax, we overrule those holdings as superseded by developments in the law of due process.
In this case, there is no question that Quill has purposefully directed its activities at North Dakota residents, that the magnitude of those contacts are more than sufficient for due process purposes, and that the use tax is related to the benefits Quill receives from access to the State. We therefore agree with the North Dakota Supreme Court's conclusion that the Due Process Clause does not bar enforcement of that State's use tax against Quill.
Affirmed.
Did Quill Corporation own any property in North Dakota?