Sutherland Salt Shaker - Vol. 3, No. 1 - February 2012


In this issue: SALT Pet(s) of the Month; New York New York; California Screaming; and Policy Wonk.

Exceprt from "Simon Says!..":

In an unusual twist in the ongoing debate over sales tax collection by e-commerce retailers, Simon Property Group, L.P. (Simon), the largest operator of U.S. shopping malls, filed a lawsuit on November 3, 2011, seeking a writ of mandate aimed directly at to force the Indiana Department of Revenue (Department) to require Amazon to collect and remit Indiana sales tax. The complaint alleges that the Department acted in an “illegal and unconstitutional” manner for failing to “comply with their statutory duties” to require to collect Indiana sales tax. State of Indiana ex. Rel. Simon Property Group, L.P. v. Indiana Dep’t of Revenue and John Eckart, Comm’r of the Indiana Dep’t of Revenue, 49D13 11 11 PL 042652 (Ind. Super. Ct. Marion County Nov. 3, 2011). The complaint further states that the Department’s actions “amount to an illegal and unconstitutional subsidy to Amazon.” Thus, Simon was seeking to compel the Department to require remote e-commerce retailers to collect sales tax even though they are protected from sales tax collection and remittance obligations under the Commerce Clause of the United States Constitution.

Indiana law provides that “[a]n action for mandate may be prosecuted against any inferior tribunal, corporation, public or corporate officer, or person to compel the performance of any: (1) act that the law specifically requires; or (2) duty resulting from any office, trust, or station.” Ind. Code § 34-27-3-1. Although in many states such a lawsuit will survive a standing challenge only if the plaintiff alleges special injury distinct from any public harm, the Indiana Supreme Court has recognized the legitimacy of such actions for the purpose of enforcing a public right rather than any special private rights. See State ex. rel. Cittadine v. Ind. Dep’t of Transp., 790 N.E.2d 978, 980 (Ind. 2003). However, the court has also held that such a mandate can survive only if the duty of the challenged officer is not discretionary—the Department is required to force to collect. State ex rel. Woodford v. Marion Super. Ct., 655 N.E.2d 63 (Ind. 1995).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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