TAX 9866 Lecture Notes - Lecture 32: United States Postal Service, Commerce Clause, Minimum Contacts
Document Summary
Two main doctrines: state regulations may not discriminate against interstate commerce, states may not impose undue burdens on interstate commerce. The court held that a state may tax exclusively interstate commerce so long as the tax does not create any effect forbidden by the commerce clause. See complete auto, supra, at 279, 97 s. ct. Unless the retailer maintained a physical presence such as retail outlets, solicitors, or property within a state, the state lacked the power to require that retailer to collect a local use tax. Physical presence rule limits states" ability to seek long-term prosperity and has prevented market participants from competing on an even playing field. In other words, under quill, a small company with diverse physical presence might be equally or more burdened by compliance costs than a large remote seller. The physical presence rule is a poor proxy for the compliance costs faced by companies that do business in multiple states.
