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C5C2A104d01 - Page 1 1 of 1 DOCUMENT QUILL CORPORATION...

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1 of 1 DOCUMENT QUILL CORPORATION, PETITIONER v. NORTH DAKOTA BY AND THROUGH ITS TAX COMMISSIONER, HEIDI HEITKAMP No. 91-194 SUPREME COURT OF THE UNITED STATES 504 U.S. 298 ; 112 S. Ct. 1904; 119 L. Ed. 2d 91; 1992 U.S. LEXIS 3123; 60 U.S.L.W. 4423; 92 Cal. Daily Op. Service 4458; 92 Daily Journal DAR 7142; 6 Fla. L. Weekly Fed. S 269 January 22, 1992, Argued May 26, 1992, Decided PRIOR HISTORY: ON WRIT OF CERTIORARI TO THE SUPREME COURT OF NORTH DAKOTA. DISPOSITION: 470 N. W. 2d 203, reversed and remanded. CASE SUMMARY: PROCEDURAL POSTURE: Petitioner appealed order of the Supreme Court of North Dakota which failed to follow precedent and held that petitioner was required to collect and pay use taxes on goods purchased for use within the state pursuant to N.D. Cent. Code § 57-40.2-01(6), notwithstanding petitioner's alleged protected out-of-state, "substantial-nexus" status. OVERVIEW: Petitioner was a mail-order house with no outlets or representatives in respondent's state. Nevertheless, respondent brought suit to collect use taxes from petitioner pursuant to N.D. Cent. Code § 57-40.2-01(6). The trial court ruled in petitioner's favor, but the state supreme court reversed, overruling National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753, 87 S.Ct. 1389 (1967). Petitioner appealed. The court found petitioner purposefully directed sufficient activities at respondent's residents to satisfy due process minimum contacts, but nevertheless fell within the safe harbor provisions of the Commerce Clause "substantial nexus" requirement proffered by Bellas Hess. The court held that stare decisis and the differences between the controlling principles of the Due Process and Commerce Clauses mandated that the Bellas Hess rule remain good law. Accordingly, the judgment of the court was reversed, and the case remanded for further proceedings consistent with the court's opinion. OUTCOME: Order requiring petitioner to pay use taxes was reversed and the case remanded because while petitioner had met the requisite minimum contacts required by the Due Process Clause, it lacked the "substantial nexus" required by the Commerce Clause for the imposition of use taxes as apportioned by respondent. CORE TERMS: nexus, use tax, interstate commerce, physical presence, taxing, mail-order, seller, bright-line, collection, physical-presence, interstate, mail, out-of-state, customers, minimum contacts, state taxes, solicitation, common carrier, taxation, stare decisis, indirect', vendor, state taxation, software, retailer, progeny, national economy, formalistic, overruling, commerce Page 1
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LexisNexis(R) Headnotes Tax Law > State & Local Taxes > Use Tax > Imposition of Tax [HN1] 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.
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