Court Continues A Fairly Busy Term


Perhaps coincidence, perhaps not, but on "Cyber Monday" the U.S. Supreme Court refused to "click yes" to consider two cases contesting the constitutionality of click-through-nexus when, as discussed further below, it denied the petitions for certiorari filed in the New York "Amazon tax" cases brought by, Inc. and, LLC. The Court did set a date for oral argument in a case in which it previously granted certiorari, U.S. v. Quality Stores, Inc., concerning whether severance payments are subject to the Federal Insurance Contributions Act (FICA). This case has state and local tax implications, given the importance of the term "wages" for purposes of various state payroll taxes.

Two new petitions for certiorari in cases involving state and local taxes have been filed, while another request for review in a state and local tax case still remains pending from the Court's prior term. And we await the Court's decision in DaimlerChrysler AG v. Bauman, a due process challenge to the exercise of personal jurisdiction by a California federal district court over a German corporation based solely on the fact that an indirect corporate subsidiary performs services on the foreign company's behalf in the forum state. Although this case does not involve a tax matter, the Court's ruling could have a profound effect on state tax matters because a state tax must comport with the Due Process Clause to withstand a constitutional challenge.

Originally Published in the Journal of Multistate Taxation and Incentives, Vol. 23, No. 10 - February 2014.

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