Quill Corp. v. North Dakota

Quill Corp. v. North Dakota

Argued January 22, 1992
Decided May 26, 1992
Full case name

Quill Corporation, Petitioner v. North Dakota by and through its Tax Commissioner,

Heidi Heitkamp

504 U.S. 298 (more)

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
The lack of a physical nexus in a state is sufficient grounds to exempt a corporation from having to pay sales and use taxes to a state.
Court membership
Case opinions
Majority Stevens, joined by unanimous (parts I, II, III); Rehnquist, Blackmun, O'Connor, Souter (part IV)
Concurrence Scalia, joined by Kennedy, Thomas
Concur/dissent White
Laws applied
U.S. Const. Art. I § 8

Quill Corp. v. North Dakota, 504 U.S. 298 (1992), was a United States Supreme Court ruling concerning use tax. Quill Corporation is an office supply retailer. Quill had no physical presence in North Dakota (neither a sales force, nor a retail outlet),[1] but it had a licensed computer software program that some of its North Dakota customers used for checking Quill's current inventories and placing orders directly. North Dakota attempted to impose a use tax on Quill, which was struck down by the Supreme Court.


The North Dakota Office of State Tax Commissioner attempted to require Quill to collect and pay use tax on sales shipped into the state.[2] The North Dakota Supreme Court upheld the statute.

Quill, incorporated in Delaware, did not have a physical location in North Dakota. None of its workers were located there. Quill sold office equipment and stationery in North Dakota by using catalogues, flyers, advertisements in national periodicals, and telephone calls. Deliveries were made by post and common carrier from out-state-locations.[3]

Opinion of the Court

North Dakota argued that under due process, Quill had established a presence, as the floppy disks were physically located in their state. The Supreme Court based its reasoning on analysis of the Commerce Clause rather than due process.[3]

The Commerce Clause gives the federal government power to regulate interstate commerce and prohibits certain state actions, such as applying duties, that interfere with trade among the states. In National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967), it was held that a business whose only contacts with the taxing state are by mail or by common carrier lacks the "substantial nexus" required under the Dormant Commerce Clause.[3]

The Court determined that Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), did not limit or undo the Bellas Hess rule. A corporation, the court ruled, may have the minimum contacts required by the due process clause and still fall short of the substantial nexus required by the Dormant Commerce Clause. The court noted that the bright-line rule of National Bellas Hess "furthers the ends" of the Dormant Commerce Clause. The Court thus reversed the decision of the North Dakota Supreme Court that required Quill to collect and remit "use" taxes on purchases made by customers from that state.[3]

Effect on taxation of online sales

In Quill Corp. v. North Dakota, the Supreme Court ruled that a business must have a physical presence in a state for that state to require it to collect sales taxes. However, the Court explicitly stated that Congress can overrule the decision through legislation.[1]

Amazon.com used this ruling in order to justify not charging sales tax on its online sales, which give it a competitive advantage over retailers from 1995 until 2012, when pressure from states made Amazon collect sales tax in some of the states.[4]

See also


  1. 1 2 "QUILL CORP. v. HEITKAMP, 504 U.S. 298 (1992)". FindLaw. Retrieved 2008-10-18.
  2. "QUILL CORP. v. NORTH DAKOTA, BY AND THROUGH ITS TAX COMMISSIONER, HEITKAMP 504 U.S. 298". Justia. Retrieved 2008-10-18.
  3. 1 2 3 4 How the High Court Could Help Amazon, by Robert Willens, CFO Magazine, 31 January 2011.
  4. The Amazon Effect The Nation. Retrieved 2 February 2016

External links

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