Document ID: ./input/supremecourt_opinions/opinions/17pdf/17-494_j4el.pdf
Page Number: 14

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

9 

Opinion of the Court 

due  process  holding,  but  not  the  Commerce  Clause  hold­
ing; and it thus reaffirmed the physical presence rule.  504 
U. S., at 307–308, 317–318.
  The  Court  in  Quill  recognized  that  intervening  prece­
dents,  specifically  Complete  Auto,  “might  not  dictate  the
same  result  were  the  issue  to  arise  for  the  first  time  to­
day.”  504  U. S.,  at  311.    But,  nevertheless,  the  Quill 
majority  concluded  that  the  physical  presence  rule  was
necessary  to  prevent  undue  burdens  on  interstate  com­
merce.  Id.,  at  313,  and  n. 6.    It  grounded  the  physical 
presence  rule  in  Complete  Auto’s  requirement  that  a  tax 
have a “ ‘substantial nexus’ ” with the activity being taxed. 
504 U. S., at 311. 

Three Justices based their decision to uphold the physi­
cal presence rule on stare decisis alone.  Id., at 320 (Scalia, 
J.,  joined  by  KENNEDY  and  THOMAS,  JJ.,  concurring  in 
part and concurring in judgment).  Dissenting in relevant 
part,  Justice  White  argued  that  “there  is  no  relationship 
between  the  physical-presence/nexus  rule  the  Court  re­
tains  and  Commerce  Clause  considerations  that  allegedly
justify  it.”  Id.,  at  327  (opinion  concurring  in  part  and 
dissenting in part). 

III 
The physical presence rule has “been the target of criti­
cism  over  many  years  from  many  quarters.”    Direct  Mar-
keting  Assn.  v.  Brohl,  814  F. 3d  1129,  1148,  1150–1151 
(CA10  2016)  (Gorsuch, J.,  concurring).    Quill,  it  has  been 
said,  was  “premised  on  assumptions  that  are  unfounded” 
and  “riddled  with  internal  inconsistencies.”    Rothfeld, 
Quill: Confusing the Commerce Clause, 56 Tax Notes 487, 
488  (1992).  Quill  created  an  inefficient  “online  sales  tax 
loophole” that gives out-of-state businesses an advantage.
A.  Laffer  &  D.  Arduin,  Pro-Growth  Tax  Reform  and  E-
Fairness  1,  4  (July  2013).    And  “while  nexus  rules  are 
clearly  necessary,”  the  Court  “should  focus  on  rules  that