On June 12, 2017, Congressman Jim Sensenbrenner (R-WI) reintroduced into Congress H.R. 2887, also known as the “No Regulation Without Representation Act of 2017” (the “Legislation”), which codifies the physical presence nexus requirement established by the U.S. Supreme Court in Quill v. North Dakota, 504 U.S. 298 (1992) (“Quill”). The Legislation is interesting for several reasons: (1) it proposes to employ a result that is the exact opposite of the recent trend to overturn Quill; (2) it defines “tax” broadly to include net income and business activity taxes; and (3) it expands the law to require a physical presence for states to regulate a person’s activity in interstate commerce outside of the tax context.
The South Carolina Department of Revenue (“Department”) appealed the South Carolina Court of Appeal’s decision in Rent-A-Center West, Inc. v. South Carolina Dep’t of Revenue on November 30, 2016. The Court of Appeals held, on October 26, 2016, that the Department did not satisfy its burden to apply alternative apportionment to Rent-A-Center West, Inc. (“RAC West”). The Court of Appeal’s decision is a big win for taxpayers in South Carolina as it reaffirms that the Department cannot rely on bald assertions to apply alternative apportionment.
The U.S. House of Representatives passed H.R. 2315, the Mobile Workforce State Income Tax Simplification Act of 2015 (“Mobile Workforce Act” or “Act”), on September 21, 2016. The Senate received the House-approved bill on September 22, 2016, and its ultimate fate remains unclear.