What was the Quill Decision?

October 02, 2018

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The Quill decision was the 1992 US Supreme Court decision out of North Dakota which held that some type of physical presence was required in order to create nexus with a state for sales tax purposes.  It differentiated between the nexus requirements under the Commerce Clause and the Due Process Clause of the US Constitution.  This physical presence requirement was often misinterpreted, and states began attacking chipping away at it almost immediately.

Transcript

Tim Schuster: So Gary, what was the Quill Decision?

Gary Bingel: The Quill Decision was a 1992 case out of North Dakota, which held that physical presence was required in order to be subject to a state sales tax. Now, it wasn't just limited to sales tax originally, although it did seem to evolve that way. States started to chip away at it immediately and as a result, the physical presence requirement was often very misunderstood. You could establish physical presence through things like agents or affiliates or even intangibles.

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