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'There is hereby levied and assessed and shall be collected, privilege taxes for theprivilege of engaging or continuing in business or doing business within this state to bedetermined by the application of rates against gross proceeds of sales or gross income orvalues, as the case may be, as provided in the following sections.' Miss. Code Ann., 1942,s 10105. The Supreme Court of Mississippi viewed that statute as applying to bothintrastate commerce and interstate commerce. The statute and the Court’s view makes aMississippi tax on the privilege of doing business within the State not to violate theCommerce Clause when it is applied to an interstate activity with a substantial nexus withthe taxing State. (d) Conclusions of the courtThe Court concluded: Taxpayer has a large operation in this State. It is dependent uponthe State for police protection and other State services the same as other citizens. Itshould pay its fair share of taxes so long, but only so long, as the tax does notdiscriminate against interstate commerce, and there is no danger of interstate commercebeing smothered by cumulative taxes of several states. Quill Corp.(a) Facts
Quill Corporation was an out of state mail order house with neither outlets nor salesrepresentatives in North Dakota. However, North Dakota filed an action in state court torequire Quill Corporation to collect and pay a use tax on goods purchasedfor use in theState.(b) Issues presentedDid Quill have Nexus with North Dakota in order for the state to impose tax on it?(c) Analysis of issuesDue Process Clause nexus is defined as a minimum connection with the State, andCommerce Clause nexus is defined as a “substantial” connection with the State. In thiscase, Quill has purposefully directed its activities at North Dakota residents. Themagnitudes of those contacts are more than sufficient for due process purposes, and thetax is related to the benefits Quill receives from access to the State. Due process concernsthe fundamental fairness of governmental activity, and the principal concern of theCommerce Clause is the effect of state regulation on the national economy and thepotential for unduly burdening interstate commerce. So a mail order house may have the"minimum contacts" with a taxing State as required by the Due Process Clause, and yetlack the "substantial nexus" with the State required by the Commerce Clause.(d) Conclusions of the court.The conclusion held by Supreme Court is an out-of-state mail-order business with nophysical presence in the state could not be required to collect that state's use taxes.