Supreme Court


The Supreme Court has denied review of New Hampshire’s lawsuit against Massachusetts seeking to invalidate the latter’s controversial personal income tax sourcing regulation. The Supreme Court’s highly anticipated decision was likely influenced by the acting U.S. Solicitor General’s amicus brief arguing against the Supreme Court taking up the case. The Supreme Court has thus passed on reviewing the broader issue of whether and to what extent a state may impose its personal income tax on…

In a January 25, 2021 Order, the Supreme Court of the United States invited the Acting Solicitor General to file a brief in New Hampshire v. Massachusetts (concerning the dispute between the two states regarding Massachusetts’ COVID-19 personal income tax sourcing regulation) to “express[ ] the views of the United States” in the matter. New Hampshire commenced the lawsuit last year, asking the Supreme Court to exercise its original jurisdiction to enjoin Massachusetts from enforcing…

Baker McKenzie attended the U.S. Supreme Court’s oral arguments yesterday in South Dakota v. Wayfair, Docket No. 17-494.  At issue in the case is whether the Court should abrogate the physical presence nexus standard that it first articulated in National Bellas Hess v. Dep’t of Revenue, 386 U.S. 753 (1967), and later affirmed in Quill Corp. v. North Dakota, 504 U.S. 298 (1992).  The Court’s decision could have a profound impact on sales and use tax nexus in the United States by altering the limitations currently imposed on a state’s ability to require out-of-state retailers to collect such tax.

After years of litigation, injunctions, and a U.S. Supreme Court decision, the controversy between Data & Marketing Association (“DMA”) (formerly Direct Marketing Association) and the State of Colorado has come to a conclusion. On February 22, 2017, DMA and the Colorado Department of Revenue (the “Department”) entered into an agreement (the “Settlement Agreement”) resolving the dispute in Direct Mktg. Ass’n v. Colo. Dep’t of Revenue, Colo. Dist. Ct., No. 13-CV-34855, which involved a challenge to the Colorado use tax reporting requirements enacted in 2010.  (The Settlement Agreement is available at http://thedma.org/wp-content/uploads/DMA-Colorado-Executed-Settlement-Agreement.pdf.)  Under the Settlement Agreement, the Department agrees that compliance with those use tax reporting requirements will not be required until July 1, 2017 and agrees to waive any and all penalties for non-collecting retailers who failed to comply with the use tax reporting requirements prior to July 1, 2017.  So on July 1, 2017, a new day of use tax notification and reporting enforcement will dawn in Colorado – and it would not be surprising if other states follow suit.