On April 4, 2018, TEI filed an amicus brief with the U.S. Supreme Court in South Dakota v. Wayfair, No. 17-494. In Wayfair, Petitioner South Dakota asked the Court to modify the “physical presence” rule established in National Bellas Hess, Inc. v. Department of Revenue of the State of Illinois, 386 U.S. 753 (1967), and upheld in Quill Corporation v. North Dakota, 504 U.S. 28 (1992). TEI’s brief did not take a position on whether the physical presence rule should be upheld, modified, or overturned. Rather, TEI filed the brief to bring the Court’s attention to the injustice and subsequent litigation that would ensue if the ruling requested by South Dakota were to be applied retroactively.
TEI’s brief noted that although the South Dakota legislature crafted its economic presence law to take effect prospectively if the Court modifies Quill and finds South Dakota’s law constitutional, retailers that relied upon Quill nonetheless remain at risk for potential retroactive application of the Court’s decision in other states. TEI noted that such a decision could have the effect of retroactively validating or expanding state statutes, regulations, and administrative policies that other states have enacted. It also could lead to double taxation and effectively transfer the burden of the tax from consumers to retailers. The retroactive application of a decision modifying Quill thus raises serious due process concerns. TEI advocated that if the Court modifies Quill’s physical presence rule, it should affirmatively state that the change is prospective only.
TEI's brief was prepared under the aegis of TEI's State and Local Tax Committee, whose chair is Marji Gordon-Brown. TEI Tax Counsel Pilar Mata coordinated the preparation of the brief and was its principal author.