Quill Corp. V. North Dakota - Opinion of The Court

Opinion of The Court

North Dakota argued that under due process, Quill had established a presence, as the floppy disks were physically located in their state. The Supreme Court based its reasoning on analysis of the Commerce Clause rather than due process.

The Commerce Clause gives the federal government power to regulate interstate commerce and prohibits certain state actions, such as applying duties, that interfere with trade among the states. In National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967), it was held that a business whose only contacts with the taxing state are by mail or by common carrier lacks the "substantial nexus" required under the Dormant Commerce Clause.

The court determined that Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), did not limit or undo the National Bellas Hess rule. A corporation, the court ruled, may have the minimum contacts required by the due process clause and still fall short of the substantial nexus required by the Dormant Commerce Clause. The court noted that the bright-line rule of National Bellas Hess "furthers the ends" of the Dormant Commerce Clause. The supreme court thus reversed the decision of the North Dakota Supreme Court requiring Quill to collect and remit "use" taxes on purchases made by customers from that state.