Policy Documents

Congress Should Not Authorize States to Expand Collection of Taxes on Internet and Mail Order Sales

David S. Addington –
April 6, 2012

The U.S. Supreme Court’s landmark 1992 decision in Quill Corporation v. North Dakota protects out-of-state businesses in the Internet era from overreaching by revenue-hungry states. The Court’s decision prevents a state from forcing an out-of-state business to serve as the state’s sales tax collector if the business has no physical presence in the state and simply takes sales orders by Internet, catalog, or telephone. Congress has under consideration legislation (S. 1832) to overturn the Quill Corporation decision. To support a strong national economy and encourage fiscal responsibility among the states, Congress should reject the legislation.