Supreme Court of the United States
NATIONAL BELLAS HESS, INCORPORATED, Appellant,
v.
DEPARTMENT OF REVENUE OF the STATE OF ILLINOIS.
No. 241.
Argued Feb. 23, 1967.
Decided May 8, 1967.
Action to recover taxes assessed under Illinois Use Tax Act. The Circuit Court, Cook County, entered judgment for Illinois Department of Revenue, and defendant appealed. The Illinois Supreme Court, 34 Ill.2d 164, 214 N.E.2d 755, affirmed, and probable jurisdiction of defendant's appeal was noted. The United States Supreme Court, Mr. Justice Stewart, held that State of Illinois had no power to impose liability on out-of-state mail order firm to collect use taxes imposed by Illinois Use Tax Act, where mail order firm maintained no office, had no agents or solicitors, owned no property, and had no telephone listing in Illinois, and where all contacts which firm had with state were via United States mail or common carrier.
Judgment reversed.
Mr.
Justice Fortas, Mr. Justice Black, and Mr. Justice Douglas dissented.
West Headnotes
[1] Federal Courts 
505
(Formerly 106k394(3))
Mail order
firm's constitutional objections to requirement that it collect and pay use
taxes imposed by Illinois Use Tax Act presented substantial federal question as
to which Supreme Court noted probable jurisdiction. S.H.A.Ill. ch. 120, § 439.3.
[2] Commerce 62.71
(Formerly 83k62.70, 83k71,
83k63)
[2]
Constitutional Law 4135
(Formerly 92k281.5, 92k283)
[2] Constitutional Law 4262
(Formerly 92k287.1, 92k287)
Test as to
whether particular state exaction is such as to invade exclusive authority of
Congress to regulate trade between states, and test for state's compliance with
requirements of due process in such area, are similar. U.S.C.A.Const.
Amend. 14.
[3] Commerce 74.5(1)
[3]
Constitutional Law 4145
(Formerly 92k285.4, 92k287)
In
determining power of state to impose burden of collecting use taxes upon
interstate sales, Constitution requires some definite link, some minimum
connection, between state and person, property, or transaction it seeks to
tax. U.S.C.A.Const.
Amend. 14.
[4] Commerce 74.5(2)
[4]
Constitutional Law 4145
(Formerly 92k285.4, 92k287)
[4] Taxation 3609
(Formerly 371k1206, 238k7(1))
State of
Illinois had no power to impose liability on out-of-state mail order firm to
collect and pay to the State use taxes imposed by Illinois Use Tax Act, where
mail order firm maintained no office, had no agents or solicitors, owned no
property, and had no telephone listing in Illinois, and where all contacts
which firm had with state were via United States mail or common carrier. U.S.C.A.Const.
Amend. 14;
S.H.A.Ill. ch. 120, § § 439.2,
439.3, 439.5, 439.8, 439.11, 439.12a, 439.14.
[5] Commerce 3
[5] Commerce 8(1)
Purpose of
commerce clause is to insure national economy free from unjustifiable local
entanglements, and, under Constitution, such is domain where Congress alone has
power of regulation and control. U.S.C.A.
Const. Art. 1, § 8, cl. 3.
**1389 *753 Archibald Cox,
Washington, D.C., for appellant.
Terence F. MacCarthy, Chicago, Ill., for
appellee.
Mr. Justice STEWART delivered the opinion of
the Court.
[1] The appellant, National Bellas Hess, is a mail order house
with its principal place of business in North Kansas *754 City,
Missouri. It is licensed to do business
in only that State and in Delaware, **1390 where it is
incorporated. Although the company has
neither outlets nor sales representatives in Illinois, the appellee, Department
of Revenue, obtained a judgment from the Illinois Supreme Court that National
is required to collect and pay to the State the use taxes imposed by
Ill.Rev.Stat. c. 120, s 439.3 (1965). [FN1] Since National's constitutional objections to
the imposition of this liability present a
substantial federal question, we noted probable jurisdiction of its appeal. [FN2]
FN1. 34
Ill.2d 164, 214 N.E.2d 755.
FN2. 385
U.S. 809, 87 S.Ct. 58, 17 L.Ed.2d 50.
The facts bearing upon National's relationship
with Illinois are accurately set forth in the opinion of the State Supreme
Court:
'(National) does not maintain in Illinois any office,
distribution house, sales house, warehouse or any other place of business; it
does not have in Illinois any agent, salesman, canvasser, solicitor or other
type of representative to sell or take orders, to deliver merchandise, to
accept payments, or to service merchandise it sells; it does not own any
tangible property, real or personal, in Illinois; it has no telephone listing
in Illinois and it has not advertised its merchandise for sale in newspapers,
on billboards, or by radio or television in Illinois.' [FN3]
FN3. 34
Ill.2d, at 166--167, 214 N.e.2d, at 757.
All of the contacts which National does have
with the State are via the United States mail
or common carrier. Twice a year
catalogues are mailed to the company's active or recent customers throughout
the Nation, including Illinois. This
mailing is supplemented by advertising 'flyers' which are occasionally mailed
to past and potential customers. Orders
for merchandise are mailed by the *755 customers to National and are
accepted at its Missouri plant. The
ordered goods are then sent to the customers either by mail or by common
carrier.
This manner of doing business is sufficient
under the Illinois statute to classify National as a '(r)etailer maintaining a
place of business in this State,' since that term includes any retailer:
'Engaging in soliciting orders within this State from users
by means of catalogues or other advertising, whether such orders are received
or accepted within or without this State.'
Ill.Rev.Stat. c. 120, s 439.2 (1965).
Accordingly, the statute requires National to
collect and pay to the appellee Department the tax imposed by Illinois upon
consumers who purchase the company's goods for use within the State. [FN4] When collecting this tax, National must give
the Illinois purchaser 'a receipt therefor in the manner and form prescribed by
the (appellee),' if one is demanded. [FN5] It must also 'keep such records, receipts,
invoices and other pertinent books, documents, memoranda and papers as the
(appellee) shall require, in such form as the (appellee) shall require,' and
must submit to such investigations, hearings, and
examinations as are needed by the appellee to administer and enforce the use
tax law.
[FN6]
Failure to keep such records or to give required receipts is punishable
by a fine of up to $5,000 and imprisonment of up to six months. [FN7] Finally,
to allow service of process on an out-of-state company like National, the
statute designates the Illinois Secretary of State as National's appointed
agent, and jurisdiction in tax collection suits attaches *756 when
process is **1391 served on him and the company is notified by
registered mail. [FN8]
FN4. Ill.Rev.Stat. c.
120, s 439.3 (1965).
FN5. Id., s 439.5.
FN6. Id., s 439.11.
FN7. Id., s 439.14.
FN8. Id., s 439.12a.
[2][3] National argues that the liabilities which Illinois has
thus imposed violate the Due Process Clause of the Fourteenth Amendment and
create an unconstitutional burden upon
interstate commerce. These two claims
are closely related. For the test
whether a particular state exaction is such as to invade the exclusive
authority of Congress to regulate trade between the States, and the test for a
State's compliance with the requirements of due process in this area are
similar. See Central
R. Co. of Pa. v. Commonwealth of Pennsylvania, 370 U.S. 607, 621--622, 82 S.Ct.
1297, 1306--1307, 8 L.Ed.2d 720 (concurring
opinion of Mr. Justice Black). As to the
former, the Court has held that 'State taxation falling on interstate commerce
* * * can only be justified as designed to make such commerce bear a fair share
of the cost of the local government whose protection it enjoys.' Freeman
v. Hewit, 329 U.S. 249, 253, 67 S.Ct. 274, 277, 91 L.Ed. 265. See also Central
Greyhound Lines, Inc. v. Mealey, 334 U.S. 653, 663, 68 S.Ct. 1260, 1266, 92
L.Ed. 1633; Northwestern
States Portland Cement Co. v. State of Minnesota, 358 U.S. 450, 462, 79 S.Ct.
357, 364, 3 L.Ed.2d 421. And in determining whether a state tax falls
within the confines of the Due process Clause, the Court has said that the
'simple but controlling question is whether the state has given anything for
which it can ask return.' Wisconsin
v. J. C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 250, 85 L.Ed. 267. See also Standard
Oil Co. v. Peck, 342 U.S. 382, 72 S.Ct. 309, 96 L.Ed. 427; Ott
v. Mississippi Val. Barge Line Co., 336 U.S. 169, 174, 69 S.Ct. 432, 434, 93
L.Ed. 585.
The same principles have been held applicable in determining the power
of a State to impose the burdens of
collecting use taxes upon interstate sales.
Here, too, the Constitution requires 'some definite link, some minimum
connection, between a state and the person, property or transaction it seeks to
tax.' Miller
Bros. Co. v. State of Maryland, 347 U.S. 340, 344--345, 74 S.Ct. 535, 539, 98
L.Ed. 744; *757Scripto, Inc. v. Carson, 362 U.S. 207--210--211, 80
S.Ct. 619, 621--622, 4 L.Ed.2d 660. [FN9] See also American
Oil Co. v. Neill, 380 U.S. 451, 458, 85 S.Ct. 1130, 1134, 14 L.Ed.2d 1.
FN9. Strictly speaking,
there is no question of the connection or link between the State and 'the
person * * * it seeks to tax.' For that
person in Miller
Bros. Co. v. State of Maryland, 347 U.S. 340, 74 S.Ct. 535, 98 L.Ed. 744, in Scripto,
Inc. v. Carson, 362 U.S. 207, 80 S.Ct. 619, 4 L.Ed.2d 660, and in the present case is the user of the goods to whom
the out-of-state retailer sells.
National is not the person being directly taxed, but rather it is asked
to collect the tax from the user. It is, however, made directly liable for the
payment of the tax whether collected or not.
Ill.Rev.Stat. c. 120, s 439.8 (1965).
In applying these principles the Court has
upheld the power of a State to impose liability upon an out-of-state seller to
collect a local use tax in a variety of circumstances. Where the sales were arranged by local agents
in the taxing State, we have upheld such
power. Felt
& Tarrant Mfg. Co. v. Gallagher, 306 U.S. 62, 59 S.Ct. 376, 83 L.Ed. 488; General
Trading Co. v. State Tax Comm'n, 322 U.S. 335, 64 S.Ct. 1028, 88 L.Ed. 1309. We have reached the
same result where the mail order seller maintained local retail stores. Nelson
v. Sears, Roebuck & Co., 312 U.S. 359, 61
S.Ct. 58, 85
L.Ed. 888; Nelson
v. Montgomery Ward & Co., 312 U.S. 373, 61 S.Ct. 593, 85 L.Ed. 897. [FN10] In those situations
the out-of-state seller was plainly accorded the protection and services of the
taxing State. **1392 The case in
this Court which represents the furthest constitutional reach to date of a
State's power to deputize an out-of-state retailer as its collection agent for
a use tax is Scripto,
Inc. v. Carson, 362 U.S. 207, 80 S.Ct. 619, 4 L.Ed.2d 660. There we held that
Florida could constitutionally impose upon a Georgia seller the duty of
collecting a state use tax upon the sale of goods shipped to customers in
Florida. In that case the seller had '10
wholesalers, jobbers, or 'salesmen' conducting continuous local solicitation in
Florida and forwarding the resulting orders *758 from that State to
Atlanta for shipment of the ordered goods.' 362
U.S., at 211, 80 S.Ct., at 621.
FN10. National
acknowledges its obligation to collect a use tax in Alabama, Kansas, and
Mississippi, since it has retail outlets in those States.
But
the Court has never held that a State may impose the duty of use tax collection
and payment upon a seller whose only connection with customers in the State is
by common carrier or the United States mail.
Indeed, in the Sears, Roebuck case the Court sharply differentiated such
a situation from one where the seller had local retail outlets, pointing out
that 'those other concerns * * * are not receiving benefits from Iowa for which
it has the power to exact a price.' 312
U.S., at 365, 61 S.Ct., at 589. And in Miller
Bros. Co. v. State of Maryland, 347 U.S. 340, 74 S.Ct. 535, 98 L.Ed. 744, the Court held that Maryland could not constitutionally
impose a use tax obligation upon a Delaware seller who had no retail outlets or
sales solicitors in Maryland. There the
seller advertised its wares to Maryland residents through newspaper and radio
advertising, in addition to mailing circulars four times a year. As a result, it made substantial sales to
Maryland customers, and made deliveries to them by its own trucks and drivers.
[4] In order to uphold the power of Illinois to impose use tax
burdens on National in this case, we would have to repudiate totally the sharp
distinction which these and other decisions have drawn between mail order
sellers with retail outlets, solicitors, or property within a State, and those
who do no more than communicate with customers in the State by mail or common
carrier as part of a general interstate business. But this basic distinction, which until now has been generally recognized by the state
taxing authorities, [FN11] is a valid
one, and we decline to obliterate it.
FN11. As of 1965, 11
States besides Illinois had use tax statutes which required a seller like
National to participate in the tax collection system. However, state taxing administrators appear
to have generally considered an advertising nexus insufficient. For they have testified that doubts as to the
constitutionality of such statutes underlay their failure to take full
advantage of their statutory authority.
Report of the Special Subcommittee on State Taxation of Interstate
Commerce of the House Committee on the Judiciary, Maryland H.R.Rep.No. 565,
89th Cong., 1st Sess., 631--635 (1965).
These doubts were substantiated by the only other State Supreme Court
that has considered the issue now before us.
The Alabama Supreme Court, dealing with a situation very much like the
present one, found that this application of the use tax statute would be
invalid under the Federal Constitution. State
v. Lane Bryant, Inc., 277 Ala. 385, 171 So.2d 91.
*759 We need not rest on the broad
foundation of all that was said in the Miller Bros. opinion, for here there was
neither local advertising nor local household deliveries, upon which the
dissenters in Miller
Bros. so largely relied.
347 U.S., at 358, 74 S.Ct., at 547. Indeed, it is difficult to conceive of
commercial transactions more exclusively interstate in character than the mail
order transactions here involved. And if
the power of Illinois to impose use tax burdens upon National were upheld, the
resulting impediments upon the free conduct of its interstate business would be
neither imaginary nor remote. For if
Illinois can impose such burdens, so can every other State, and so, indeed, can
every municipality, every school district, and every other political
subdivision throughout **1393 the Nation with power to impose sales and
use taxes. [FN12] The many variations
in rates of tax, [FN13] in allowable
exemptions, and in administrative and record-keeping requirements [FN14] could
entangle National's interstate *760 business in a virtual welter of
complicated obligations to local jurisdictions with no legitimate claim to
impose 'a fair share of the cost of the local government.'
FN12. 'Local sales
taxes are imposed today (1965) by over 2,300 localities. * * * In most States,
the local sales tax is complemented by a use tax.' H.R.Rep. No. 565, supra, at 827.
FN13. In 1964 there
were seven different rates of sales and use taxes: 2, 2 1/4, 2 1/2, 3, 3 1/2,
4, and 5%. H.R.Rep. No. 565, supra,
at 611--613, 607--608. The State of Washington has recently added an eighth, 4.2%. Wash.Rev.Code
s 82.12.020 (Supp.1965).
FN14. 'The
prevailing system requires (the seller) to administer rules which differ from
one State to another and whose application-- especially for the industrial
retailer--turns on facts which are often too remote and uncertain for the level
of accuracy demanded by the prescribed system.'
H.R.Rep. No. 565, supra, at 673.
'Given the broad spread of sales of even small and moderate
sized companies, it is clear that if just the localities which now impose the
tax were to realize anything like their potential of out-of-State registrants
the recordkeeping task of multistate sellers would be clearly
intolerable.' Id., at 882.
[5] The very purpose of the Commerce Clause was to ensure a
national economy free from such unjustifiable local entanglements. Under the Constitution, this is a domain
where Congress alone has the power of regulation and control. [FN15]
FN15. Congress has
in fact recently evidenced an active interest in this area. See Tit. II, Pub.L. 86--272, 73 Stat. 556, as
amended by Pub.L. 87--17, 75 Stat. 41, which authorized the detailed
congressional study of state taxation of
interstate commerce that resulted in H.R.Rep. No. 565, supra. See also H.R.Rep. No. 2013, 89th Cong., 2d
Sess. (1966).
The judgment is reversed.
Reversed.
Mr. Justice FORTAS, with whom Mr. Justice
BLACK and Mr. Justice DOUGLAS join, dissenting.
In my opinion, this Court's decision in Scripto,
Inc. v. Carson, 362 U.S. 207, 80 S.Ct. 619, 4 L.Ed.2d 660 (1960), as well as a realistic approach to the facts of
appellant's business, dictates affirmance of the judgment of the Supreme Court
of Illinois.
National Bellas Hess is a large retail
establishment specializing in wearing apparel.
Directly and through subsidiaries, it operates a national retail mail
order business with headquarters in North Kansas City, Missouri, and its wholly
owned subsidiaries operate a large number of retail stores in various States.
In 1961, appellant's net sales were in the neighborhood of *761
$60,000,000, and its accounts receivable amounted to about $15,500,000. [FN1]
FN1. Moody's Industrial Manual (1962).
Its sales in Illinois amounted to $2,174,744
for the approximately 15 months for which the taxes in issue in this case were
assessed. This substantial volume is
obtained by twice-a-year catalogue mailings, supplemented by 'intermediate
smaller 'sales books' or 'flyers," as the court below styled them. The catalogue contains about 4,000 items of
merchandise. The company's mailing list
includes over 5,000,000 names. The
'flyers' are sent to an even larger list than the catalogues and are
occasionally mailed in bulk addressed to 'occupant.'
A substantial part of Bellas Hess' sales is on
credit. Its catalogue features 'NBH
Budget Aid Credit'--which requires no money down but requires the purchaser to
make monthly payments which include a service fee or interest charge, and which
also incorporates an agreement, unless expressly rejected by the purchaser, for
'Budget Aid Family **1394 Insurance.'
The company also offers 'charge account' services--payable monthly
including a 'service charge' if the account is not fully paid within 30
days. The form to be filled in for
credit purchases contains the usual type of information, including place of
employment, name of bank, marital status, home ownership or rental. Merchandise
can also be bought c.o.d. or by sending a check or money order with the order for goods. [FN2]
FN2. Because this
case was tried on affidavits, reference has also been made to the National
Bellas Hess Catalogue, Spring and Summer 1967, to supplement the picture of
appellant's business afforded by the record.
There should be no doubt that this
large-scale, systematic, continuous solicitation and exploitation of the
Illinois consumer market is a sufficient 'nexus' to require Bellas Hess to
collect from Illinois customers and to *762 remit the use tax,
especially when coupled with the use of the credit resources of residents of
Illinois, dependent as that mechanism is upon the State's banking and credit
institutions. Bellas Hess is not simply
using the facilities of interstate commerce to serve customers in
Illinois. It is regularly and
continuously engaged in 'exploitation of the consumer market' of Illinois (Miller
Bros. Co. v. State of Maryland, 347 U.S. 340, 347, 74 S.Ct. 535, 540, 98 L.Ed.
744 (1954)) by soliciting residents of Illinois
who live and work there and have homes and banking connections there, and who,
absent the solicitation of Bellas Hess, might buy locally and pay the sales tax
to support their State. Bellas Hess
could not carry on its business in Illinois, and particularly its substantial
credit business, without utilizing Illinois banking
and credit facilities. Since the case
was tried on affidavits, we are not informed as to the details of the company's
credit operations in Illinois. We do not know whether it utilizes credit
information or collection agencies, or similar institutions. The company states that it has 'brought no
suits in the State of Illinois.'
Accepting this as true, it would nevertheless be unreasonable to assume
that the company does not either sell or assign its accounts or otherwise take
measures to collect its delinquent accounts, or that collection does not
include local activities by the company or its assignees or representatives.
Bellas Hess enjoys the benefits of, and
profits from the facilities nurtured by, the State of Illinois as fully as if
it were a retail store or maintained salesmen therein. Indeed, if it did either, the benefit that it
received from the State of Illinois would be no more than it now has--the
ability to make sales of its merchandise, to utilize credit facilities, and to
realize a profit; and, at the same time, it would be required to pay additional
taxes. Under the present arrangement, it conducts its substantial, regular, and
systematic business in Illinois and the State demands *763 only that it
collect from its customer-users--and remit to the State--the use tax which is
merely equal to the sales tax which resident merchants must collect and remit.
To excuse Bellas Hess from this obligation is to burden and penalize retailers located in Illinois who must collect the sales
tax from their customers. In Illinois
the rate is 3 1/2%, and when it is realized that in some communities the sales
tax requires, in effect, that as much as 5% be added to the amount that
customers of local, tax-paying stores must pay, [FN3] the importance
of the competitive discrimination becomes apparent. While this advantage to out-of-state sellers
is tolerable and a necessary constitutional consequence where the sales are
occasional, minor and sporadic and not the result of a calculated, systematic
exploitation of the market, it certainly should **1395 not be extended
to instances where the out-of-state company is engaged in exploiting the local
market on a regular, systematic, large-scale basis. In such cases, the difference between the
nature of the business conducted by the mail order house and by the local enterprise
is not entitled to constitutional significance.
The national mail order business amounts to over $2,400,000,000 a year. [FN4] Some of this is
undoubtedly subject to the full range of taxes because of the location of
stores in the various States, [FN5] and some of it
is and should be exempt from state use tax because of its sporadic or minor
nature. See Report of the Special
Subcommittee on State Taxation of Interstate Commerce of the House Judiciary
Committee, H.R.Rep. No. 565, 89th Cong., 1st Sess., *764 Vol. 3 (1965),
at 770--777. But the volume which, under
the present decision, will be placed in a favored position and exempted from bearing its fair burden of the
collection of state taxes certainly will be substantial, and as state sales
taxes increase, this haven of immunity may well increase in size and importance.
FN3. This is the
current rate in Pennsylvania.
Pa.Stat.Ann., Tit. 72, s 3403--201 (1964). See The World Almanac (1967, Newspaper
Enterprise Assn.) 136--137.
FN4. U.S. Bureau of
the Census, 1963 Census of Business, Retail Trade-Area Statistics, pt. 1, table
2, p. 1--8 (1966).
FN5. See Nelson
v. Sears, Roebuck & Co., 312 U.S. 359, 61 S.Ct. 586, 85 L.Ed. 888 (1941); Nelson
v. Montgomery Ward & Co., 312 U.S. 373, 61 S.Ct. 593, 85 L.Ed. 897 (1941).
In Scripto, supra, this Court applied a
sensible, practical conception of the Commerce Clause. The interstate seller which, in that case,
claimed constitutional immunity from the collection of the Florida use tax had,
like appellant here, no office or place of business in the State, and had no
property or employees there. It
solicited orders in Florida through local 'independent
contractors' or brokers paid on a commission basis. These brokers were furnished catalogues and
samples, and forwarded orders to Scripto, out of state. The Court noted that the seller was 'charged
with no tax--save when * * * he fails or refuses to collect it' (362
U.S., at 211, 80 S.Ct., at 621) [FN6] and that
the State 'reimburs (ed the seller) * * * for its service' as tax collector (362
U.S., at 212, 80 S.Ct., at 622). The same is true in the present case. [FN7] I do not see how Scripto
is *765 meaningfully distinguishable from this case. In fact, Scripto involved the sale of a
single article of commerce. The
'exploitation' of the State's market was by no means as pervasive or
comprehensive as is here involved, nor was there any reference to the company's
use of the State's credit institutions.
FN6. Our observation
in Nelson
v. Sears, Roebuck & Co., 312 U.S. 359, 365--366, 61 S.Ct. 586, 589, 85
L.Ed. 888 (1941), is an apt response to
appellant's claim that it will not be able to collect all of the tax from its
purchasers: '(S)o far as assumed losses on tax collections are concerned,
respondent is in no position to found a constitutional right on the practical
opportunities for tax avoidance which its method of doing business affords Iowa
residents, or to claim a constitutional immunity because it may elect to deliver the goods
before the tax is paid.' Actually, it appears that appellant's method of doing
business is such as to minimize the non-collection of the tax.
FN7. The Illinois
statute provides for a 'discount of 2% or $5 per calendar year, whichever is
greater * * * to reimburse the retailer for expenses incurred in collecting the
tax, keeping records, preparing and filing returns, remitting the tax and
supplying data * * *.' Ill.Rev.Stat. c. 120, s 439.9 (1965). Appellant does not claim that this amount is
inadequate to reimburse it for its expenses in collecting the tax for the State.
The present case is, of course, not at all
controlled by Miller
Bros. Co. v. State of Maryland, 347 U.S. 340, 74 S.Ct. 535, 98 L.Ed. 744 (1954). In that case, as
this Court said, the company sold its merchandise at its store in Delaware;
there was 'no solicitation other than the incidental effects of general
advertising * * * no invasion or exploitation of **1396 the consumer
market * * *.' 347
U.S., at 347, 74 S.Ct., at 540. As the Court noted in Scripto, supra, Miller
Bros. was a case in which there was 'no regular, systematic displaying of its
products by catalogs, samples or the like.' 362 U.S.,
at 212, 80 S.Ct., at 622. On the contrary, in the present case,
appellant regularly sends not only its catalogue, but even bulk mailings
soliciting business addressed to 'occupant,' and it offers and extends credit
to residents of Illinois based on their local financial references.
As the Court says, the test whether an
out-of-state business must comply with a state levy is variously formulated:
'whether the state has given anything for which it can ask return'; [FN8] whether the
out-of-state business enjoys the protection or benefits of the State; [FN9] whether there is a sufficient nexus: 'Some definite link,
some minimum connection, between a state and the person, property or
transaction it seeks to tax.' [FN10] However this is formulated, it seems to me
entirely clear that a mail order house engaged in the business of regularly,
systematically, and on a large scale offering merchandise for sale in a State
in competition with local retailers, and *766 soliciting
deferred-payment credit accounts from the State's residents, is not excused
from compliance with the State's use tax obligations by the Commerce Clause or
the Due Process Clause of the Constitution.
FN8. Wisconsin
v. J. C. Penney Co., 311 U.S. 435, 444, 61 S.Ct. 246, 250, 85 L.Ed. 267 (1940).
FN9. Nelson
v. Sears, Roebuck & Co., 312 U.S. 359, 364, 61 S.Ct. 586, 588, 85 L.Ed. 888
(1941).
FN10. Miller
Bros. Co. v. State of Maryland, 347 U.S. 340, 344-- 345, 74 S.Ct. 535, 539. 98
L.Ed. 744 (1954).
It is hardly worth remarking that appellant's
expressions of consternation and alarm at the burden which the mechanics of
compliance with use tax obligations would place upon it and others similarly
situated should not give us pause. The burden is no greater than that placed
upon local retailers by comparable sales tax obligations; and the Court's
response that these administrative and record keeping requirements could
'entangle' appellant's interstate business in a welter of complicated
obligations vastly underestimates the skill of contemporary man and his
machines. There is no doubt that the
collection of taxes from consumers is a burden; but it is no more of a burden
on a mail order house such as appellant located in another State than on an
enterprise in the same State which accepts orders by mail; and it is, indeed,
hardly more of a burden than it is on any ordinary retail store in the taxing
State.
I would affirm.
386 U.S. 753, 87 S.Ct. 1389, 18 L.Ed.2d 505
END OF
DOCUMENT