The U.S. Supreme Court has declined to consider the constitutionality of New York’s “Amazon” click-through sales tax nexus law, leaving it in effect and emboldening other states’ similar efforts. Unless federal legislation is enacted, interstate retailers are facing an era of unprecedented uncertainty as states seek to apply their new laws to compel tax collection by out-of-state retailers.
The Illinois Supreme Court recently struck down an Illinois Department of Revenue (Department) regulation sourcing sales to the location of order acceptance. While the Supreme Court found that the Taxpayers’ Bill of Rights protected the taxpayer from retrospective liability, going forward, Illinois retailers need to closely evaluate their filing positions. The decision will lead to a period of chaos for taxpayers, local governments and the Department.
The Tax Court of New Jersey recently issued an important order that may have eviscerated the impact of the Throw Out Rule on intangibles holding companies. On its face the order does not appear to address the application of the Throw Out Rule to traditional operating businesses, however the “bottom line” of the order should be applicable to all businesses.
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