The Impact of the Internet Upon Long-Standing Rules of Taxation

By James F. McDonough, Jr. on October 3, 2012

There are certain legal doctrines that have been developed to address state taxation of non-resident businesses. The Supreme Court created a four part test in 1977 in Complete Auto Transit, Inc. The first part was that an out-of-state business must have a “connection” or nexus to the state seeking to impose tax. In Quill v. North Dakota (1992), the Supreme court held that an out-of-state mail order house without sales outlets or representatives in North Dakota could not be required to collect North Dakota sales tax, upholding National Bellas Hess (1967) v. Dept of Revenue, the State of Illinois.