Document ID: ./input/supremecourt_opinions/opinions/17pdf/17-494_j4el.pdf
Page Number: 3.0

Cite as:  585 U. S. ____ (2018) 

3 

Syllabus 

apply as well to the question whether physical presence is a requisite
for an out-of-state seller’s liability to remit sales taxes.  Other aspects 
of the Court’s doctrine can better and more accurately address poten-
tial burdens on interstate commerce, whether or not Quill’s physical 
presence rule is satisfied.
  Second,  Quill  creates  rather  than  resolves  market  distortions.    In 
effect,  it  is  a  judicially  created  tax  shelter  for  businesses  that  limit 
their physical presence in a State but sell their goods and services to 
the  State’s  consumers,  something  that  has  become  easier  and  more
prevalent as technology has advanced.  The rule also produces an in-
centive to avoid physical presence in multiple States, affecting devel-
opment that might be efficient or desirable. 

Third,  Quill  imposes  the  sort  of  arbitrary,  formalistic  distinction 
that the Court’s modern Commerce Clause precedents disavow in fa-
vor  of  “a  sensitive,  case-by-case  analysis  of  purposes  and  effects,” 
West Lynn Creamery, Inc. v. Healy, 512 U. S. 186, 201.  It treats eco-
nomically  identical  actors  differently  for  arbitrary  reasons.    For  ex-
ample, a business that maintains a few items of inventory in a small
warehouse in a State is required to collect and remit a tax on all of its
sales  in  the  State,  while  a  seller  with  a  pervasive  Internet  presence 
cannot  be  subject  to  the  same  tax  for  the  sales  of  the  same  items.
Pp. 10–14. 

(2) When the day-to-day functions of marketing and distribution
in  the  modern  economy  are  considered,  it  becomes  evident  that 
Quill’s physical presence rule is artificial, not just “at its edges,” 504
U. S.  at  315,  but  in  its  entirety.    Modern  e-commerce  does  not  align
analytically with a test that relies on the sort of physical presence de-
fined in Quill.  And the Court should not maintain a rule that ignores 
substantial virtual connections to the State.  Pp. 14–15.

(3) The physical presence rule of Bellas Hess and Quill is also an 
extraordinary imposition by the Judiciary on States’ authority to col-
lect taxes and perform critical public functions.  Forty-one States, two
Territories, and the District of Columbia have asked the Court to re-
ject Quill’s test.  Helping respondents’ customers evade  a lawful tax 
unfairly  shifts  an  increased  share  of  the  taxes  to  those  consumers 
who buy from competitors with a physical presence in the State.  It is 
essential to public confidence in the tax system that the Court avoid
creating inequitable exceptions.  And it is also essential to the confi-
dence  placed  in  the  Court’s  Commerce  Clause  decisions.    By  giving
some  online  retailers  an  arbitrary  advantage  over  their  competitors 
who  collect  state  sales  taxes,  Quill’s  physical  presence  rule  has  lim-
ited  States’  ability  to  seek  long-term  prosperity  and  has  prevented
market  participants  from  competing  on  an  even  playing  field. 
Pp. 16–17.