Sales Tax on internet sales is controlled by a Supreme Court decision Quill v Noth Dakota which involved a mail order company but its the reason why Internet sales are not taxed unless the seller has a "physical presence" in the taxing state. Some courts have liberally interpreted the physical presence test to include certain subcontractors or even maintaining inventory or other property in the state.
I suspect Dell's tax is a result of a compromise with various state taxing authorities as a number of states have gone after some of the major internet sellers who reached compromises. The poster who posted that taxes are technically due regardless of whether the seller collects the tax is correct--its called a use tax and its what you pay when you register a vehicle purchased out of state. In practice, almost no one pays it on personal goods that are not subject to registration.
If you are interested in the case, I have attached its text below. The states continue to lobby congress to pass a law establishing a multistate sales tax rule....
Quill Corp. v. North Dakota, 504 U.S. 298 (1992).
Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992).
[May 26, 1992]
Justice Stevens delivered the opinion of the Court.
In this case the Supreme Court of North Dakota declined to follow Bellas Hess
because "the tremendous social, economic, commercial, and legal innovations" of
the past quarter century have rendered its holding "obsole[te]." 470 N. W. 2d
203, 208 (1991). Having granted certiorari, 502 U. S. ___, we must either
reverse the State Supreme Court or overrule Bellas Hess. While we agree with
much of the State Court's reasoning, we take the former course.
Quill is a Delaware corporation with offices and warehouses in Illinois,
California, and Georgia. None of its employees work or reside in North Dakota
and its ownership of tangible property in that State is either insignificant or
nonexistent. [n.1] Quill sells office equipment and supplies; it solicits
business through catalogs and flyers, advertisements in national periodicals,
and telephone calls. Its annual national sales exceed $200,000,000, of which
almost $1,000,000 are made to about 3,000 customers in North Dakota. It is the
sixth largest vendor of office supplies in the State. It delivers all of its
merchandise to its North Dakota customers by mail or common carrier from out of
As a corollary to its sales tax, North Dakota imposes a use tax upon property
purchased for storage, use or consumption within the State. North Dakota
requires every "retailer maintaining a place of business in" the State to
collect the tax from the consumer and remit it to the State. N. D. Cent. Code §
57-40.2-07 (Supp. 1991). In 1987 North Dakota amended the statutory definition
of the term "retailer" to include "every person who engages in regular or
systematic solicitation of a consumer market in th[e] state." § 57-40.2-01(6).
State regulations in turn define"regular or systematic solicitation" to mean
three or more advertisements within a 12 month period. N. D. Admin. Code §
81-04.1-01-03.1 (1988). Thus, since 1987, mail order companies that engage in
such solicitation have been subject to the tax even if they maintain no property
or personnel in North Dakota.
Quill has taken the position that North Dakota does not have the power to compel
it to collect a use tax from its North Dakota customers. Consequently, the
State, through its Tax Commissioner, filed this action to require Quill to pay
taxes (as well as interest and penalties) on all such sales made after July 1,
1987. The trial court ruled in Quill's favor, finding the case indistinguishable
from Bellas Hess; specifically, it found that because the State had not shown
that it had spent tax revenues for the benefit of the mail order business, there
was no "nexus to allow the state to define retailer in the manner it chose."
App. to Pet. for Cert. A41.
The North Dakota Supreme Court reversed, concluding that "wholesale changes" in
both the economy and the law made it inappropriate to follow Bellas Hess today.
470 N. W. 2d, at 213. The principal economic change noted by the court was the
remarkable growth of the mail order business "from a relatively inconsequential
market niche" in 1967 to a "goliath" with annual sales that reached "the
staggering figure of $183.3 billion in 1989." Id., at 208, 209. Moreover, the
court observed, advances in computer technology greatly eased the burden of
compliance with a " `welter of complicated obligations' " imposed by state and
local taxing authorities. Id., at 215 (quoting Bellas Hess, 386 U. S., at
Equally important, in the court's view, were the changes in the "legal
landscape." With respect to the Commerce Clause, the court emphasized that
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977), rejected the line of
cases holding that the direct taxation of interstate commerce was impermissible
and adopted instead a "consistent andrational method of inquiry [that focused
on] the practical effect of [the] challenged tax." Mobil Oil Corp. v.
Commissioner of Taxes of Vt., 445 U.S. 425, 443 (1980). This and subsequent
rulings, the court maintained, indicated that the Commerce Clause no longer
mandated the sort of physical presence nexus suggested in Bellas Hess.
Similarly, with respect to the Due Process Clause, the North Dakota court
observed that cases following Bellas Hess had not construed "minimum contacts"
to require physical presence within a State as a prerequisite to the legitimate
exercise of state power. The State Court then concluded that "the Due Process
requirement of a `minimal connection' to establish nexus is encompassed within
the Complete Auto test" and that the relevant inquiry under the latter test was
whether "the state has provided some protection, opportunities, or benefit for
which it can expect a return." 470 N. W. 2d, at 216.
Turning to the case at hand, the State Court emphasized that North Dakota had
created "an economic climate that fosters demand for" Quill's products,
maintained a legal infrastructure that protected that market, and disposed of 24
tons of catalogs and flyers mailed by Quill into the State every year. Id., at
218-219. Based on these facts, the court concluded that Quill's "economic
presence" in North Dakota depended on services and benefits provided by the
State and therefore generated "a constitutionally sufficient nexus to justify
imposition of the purely administrative duty of collecting and remitting the use
tax." Id., at 219. [n.2]
As in a number of other cases involving the application of state taxing statutes
to out of state sellers, our holding in Bellas Hess relied on both the Due
Process Clause and the Commerce Clause. Although the "two claims are closely
related," Bellas Hess, 386 U. S., at 756, the clauses pose distinct limits on
the taxing powers of the States. Accordingly, while a State may, consistent with
the Due Process Clause, have the authority to tax a particular taxpayer,
imposition of the tax may nonetheless violate the Commerce Clause. See, e. g.,
Tyler Pipe Industries, Inc. v. Washington State Dept. of Revenue, 483 U.S. 232
The two constitutional requirements differ fundamentally, in several ways. As
discussed at greater length below, see infra, at Part IV, the Due Process Clause
and the Commerce Clause reflect different constitutional concerns. Moreover,
while Congress has plenary power to regulate commerce among the States and thus
may authorize state actions that burden interstate commerce, see International
Shoe Co. v. Washington, 326 U.S. 310, 315 (1945), it does not similarly have the
power to authorize violations of the Due Process Clause.
Thus, although we have not always been precise in distinguishing between the
two, the Due Process Clause and the Commerce Clause are analytically distinct.
" `Due process' and `commerce clause' conceptions are not always sharply
separable in dealing with these problems. . . . To some extent they overlap. If
there is a want of due process to sustain the tax, by that fact alone any burden
the tax imposes on the commerce among the states becomes `undue.' But, though
overlapping, the two conceptions are not identical. There may be more than
sufficient factual connections, with economic and legal effects, between the
transaction and the taxing state to sustain the tax as against due process
objections. Yet it may fall because of itsburdening effect upon the commerce.
And, although the two notions cannot always be separated, clarity of
consideration and of decision would be promoted if the two issues are
approached, where they are pre-sented, at least tentatively as if they were
separate and distinct, not intermingled ones." International Harvester Co. v.
Department of Treasury, 322 U.S. 340, 353 (1944) (Rutledge, J., concurring in
part and dissenting in part).
Heeding Justice Rutledge's counsel, we consider each con stitutional limit in
The Due Process Clause "requires some definite link, some minimum connection,
between a state and the person, property or transaction it seeks to tax," Miller
Bros. Co. v. Maryland, 347 U.S. 340, 344-345 (1954), and that the "income
attributed to the State for tax purposes must be rationally related to `values
connected with the taxing State.' " Moorman Mfg. Co. v. Bair, 437 U.S. 267, 273
(1978) (citation omitted). Here, we are concerned primarily with the first of
these requirements. Prior to Bellas Hess, we had held that that requirement was
satisfied in a variety of circumstances involving use taxes. For example, the
presence of sales personnel in the State, [n.3] or the maintenance of local
retail stores in the State, [n.4] justified the exercise of that power because
the seller's local activities were "plainly accorded the protection and services
of the taxing State." Bellas Hess, 386 U. S., at 757. The furthest extension of
that power was recognized in Scripto, Inc. v. Carson, 362 U.S. 207 (1960), in
which the Court upheld a use tax despite the fact that all of the seller's in
state solicitation was performed by independent contractors. These cases all
involved some sort of physical presencewithin the State, and in Bellas Hess the
Court suggested that such presence was not only sufficient for jurisdiction
under the Due Process Clause, but also necessary. We expressly declined to
obliterate the "sharp distinction . . . between mail order sellers with retail
outlets, solicitors, or property within a State, and those who do no more than
communicate with customers in the State by mail or common carrier as a part of a
general interstate business." 386 U. S., at 758.
Our due process jurisprudence has evolved substantially in the 25 years since
Bellas Hess, particularly in the area of judicial jurisdiction. Building on the
seminal case of International Shoe Co. v. Washington, 326 U.S. 310 (1945), we
have framed the relevant inquiry as whether a defendant had minimum contacts
with the jurisdiction "such that the maintenance of the suit does not offend
`traditional notions of fair play and substantial justice.' " Id., at 316
(quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). In that spirit, we have
abandoned more formalistic tests that focused on a defendant's "presence" within
a State in favor of a more flexible inquiry into whether a defendant's contacts
with the forum made it reasonable, in the context of our federal system of
government, to require it to defend the suit in that State. In Shaffer v.
Heitner, 433 U.S. 186, 212 (1977), the Court extended the flexible approach that
International Shoe had prescribed for purposes of in personam jurisdiction to in
rem jurisdiction, concluding that "all assertions of state court jurisdiction
must be evaluated according to the standards set forth in International Shoe and
Applying these principles, we have held that if a foreign corporation
purposefully avails itself of the benefits of an economic market in the forum
State, it may subject itself to the State's in personam jurisdiction even if it
has no physical presence in the State. As we explained in Burger King Corp. v.
Rudzewicz, 471 U.S. 462 (1985):
"Jurisdiction in these circumstances may not be avoided merely because the
defendant did not physically enter the forum State. Although territorial
presence frequently will enhance a potential defendant's affiliation with a
State and reinforce the reasonable foreseeability of suit there, it is an
inescapable fact of modern commercial life that a substantial amount of business
is transacted solely by mail and wire communications across state lines, thus
obviating the need for physical presence within a State in which business is
conducted. So long as a commercial actor's efforts are `purposefully directed'
toward residents of another State, we have consistently rejected the notion that
an absence of physical contacts can defeat personal jurisdiction there." Id., at
476 (emphasis in original).
Comparable reasoning justifies the imposition of the collection duty on a mail
order house that is engaged in continuous and widespread solicitation of
business within a State. Such a corporation clearly has "fair warning that [its]
activity may subject [it] to the jurisdiction of a foreign sovereign." Shaffer
v. Heitner, 433 U. S., at 218 (Stevens, J., concurring in judgment). In "modern
commercial life" it matters little that such solicitation is accomplished by a
deluge of catalogs rather than a phalanx of drummers: the requirements of due
process are met irrespective of a corporation's lack of physical presence in the
taxing State. Thus, to the extent that our decisions have indicated that the Due
Process Clause requires physical presence in a State for the imposition of duty
to collect a use tax, we overrule those holdings as superseded by developments
in the law of due process.
In this case, there is no question that Quill has purposefully directed its
activities at North Dakota residents, that the magnitude of those contacts are
more than sufficient for due process purposes, and that the use tax is related
to the benefits Quill receives from access to the State. Wetherefore agree with
the North Dakota Supreme Court's conclusion that the Due Process Clause does not
bar enforcement of that State's use tax against Quill.
Article I, § 8, cl. 3 of the Constitution expressly authorizes Congress to
"regulate Commerce with foreign Nations, and among the several States." It says
nothing about the protection of interstate commerce in the absence of any action
by Congress. Nevertheless, as Justice Johnson suggested in his concurring
opinion in Gibbons v. Ogden, 9 Wheat. 1, 231-232, 239 (1824), the Commerce
Clause is more than an affirmative grant of power; it has a negative sweep as
well. The clause, in Justice Stone's phrasing, "by its own force" prohibits
certain state actions that interfere with interstate commerce. South Carolina
State Highway Dept. v. Barnwell Bros., Inc., 303 U.S. 177, 185 (1938).
Our interpretation of the "negative" or "dormant" Commerce Clause has evolved
substantially over the years, particularly as that clause concerns limitations
on state taxation powers. See generally, P. Hartman, Federal Limitations on
State and Local Taxation §§ 2:9-2:17 (1981). Our early cases, beginning with
Brown v. Maryland, 12 Wheat. 419 (1827), swept broadly, and in Leloup v. Port of
Mobile, 127 U.S. 640, 648 (1888), we declared that "no State has the right to
lay a tax on interstate commerce in any form." We later narrowed that rule and
distinguished between direct burdens on interstate commerce, which were
prohibited, and indirect burdens, which generally were not. See, e. g., Sanford
v. Poe, 69 F. 546 (CA6 1895), aff'd sub nom. Adams Express Co. v. Ohio State
Auditor, 165 U.S. 194, 220 (1897). Western Live Stock v. Bureau of Revenue, 303
U.S. 250, 256-258 (1938), and subsequent decisions rejected this formal,
categorical analysis and adopted a "multiple taxation doctrine" that focused not
on whether a tax was "direct" or "indirect" but rather on whether a tax
subjected interstate commerce to a risk of multiple taxation. However, in
Freeman v. Hewit, 329 U.S. 249, 256 (1946), we embraced again the formal
distinction between direct and indirect taxation, invalidating Indiana's
imposition of a gross receipts tax on a particular transaction because that
application would "impos[e] a direct tax on interstate sales." Most recently, in
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274, 285 (1977), we renounced the
Freeman approach as "attaching constitutional significance to a semantic
difference." We expressly overruled one of Freeman's progeny, Spector Motor
Service, Inc. v. O'Connor, 340 U.S. 602 (1951), which held that a tax on "the
privilege of doing interstate business" was unconstitutional, while recognizing
that a differently denominated tax with the same economic effect would not be
unconstitutional. Spector, as we observed in Railway Express Agency, Inc. v.
Virginia, 358 U.S. 434, 441 (1959), created a situation in which "magic words or
labels" could "disable an otherwise constitutional levy." Complete Auto
emphasized the importance of looking past "the formal language of the tax
statute [to] its practical effect," Complete Auto, 430 U. S., at 279, and set
forth a four part test that continues to govern the validity of state taxes
under the Commerce Clause. [n.5]
Bellas Hess was decided in 1967, in the middle of this latest rally between
formalism and pragmatism. Contrary to the suggestion of the North Dakota Supreme
Court, this timing does not mean that Complete Auto rendered Bellas Hess
"obsolete." Complete Auto rejected Freeman and Spector's formal distinction
between "direct" and "indirect"taxes on interstate commerce because that
formalism allowed the validity of statutes to hinge on "legal terminol ogy,"
"draftsmanship and phraseology." 430 U. S., at 281. Bellas Hess did not rely on
any such labeling of taxes and therefore did not automatically fall with Freeman
and its progeny.
While contemporary Commerce Clause jurisprudence might not dictate the same
result were the issue to arise for the first time today, Bellas Hess is not
inconsistent with Complete Auto and our recent cases. Under Complete Auto's four
part test, we will sustain a tax against a Commerce Clause challenge so long as
the "tax  is applied to an activity with a substantial nexus with the taxing
State,  is fairly apportioned,  does not discriminate against interstate
commerce, and  is fairly related to the services provided by the State." 430
U. S., at 279. Bellas Hess concerns the first of these tests and stands for the
proposition that a vendor whose only contacts with the taxing State are by mail
or common carrier lacks the "substantial nexus" required by the Commerce Clause.
Thus, three weeks after Complete Auto was handed down, we cited Bellas Hess for
this proposition and discussed the case at some length. In National Geographic
Society v. California Bd. of Equalization, 430 U.S. 551, 559 (1977), we affirmed
the continuing vitality of Bellas Hess' "sharp distinction . . . between mail
order sellers with [a physical presence in the taxing] State and those . . . who
do no more than communicate with customers in the State by mail or common
carrier as part of a general interstate business." We have continued to cite
Bellas Hess with approval ever since. For example, in Goldberg v. Sweet, 488
U.S. 252, 263 (1989), we expressed "doubt that termination of an interstate
telephone call, by itself, provides a substantial enough nexus for a State to
tax a call. See National Bellas Hess . . . (receipt of mail provides
insufficient nexus)." See also D. H. Holmes Co. v. McNamara, 486 U.S. 24, 33
(1988); Commonwealth Edison Co. v. Montana, 453 U.S. 609, 626 (1981); Mobil Oil
Corp. v. Commissioner of Taxes, 445 U. S., at 437; National Geographic Society,
430 U. S., at 559. For these reasons, we disagree with the State Supreme Court's
conclusion that our decision in Complete Auto undercut the Bellas Hess rule.
The State of North Dakota relies less on Complete Auto and more on the evolution
of our due process jurisprudence. The State contends that the nexus requirements
imposed by the Due Process and Commerce Clauses are equivalent and that if, as
we concluded above, a mail order house that lacks a physical presence in the
taxing State nonetheless satisfies the due process "minimum contacts" test, then
that corporation also meets the Commerce Clause "substantial nexus" test. We
disagree. Despite the similarity in phrasing, the nexus requirements of the Due
Process and Commerce Clauses are not identical. The two standards are animated
by different constitutional concerns and policies.
Due process centrally concerns the fundamental fairness of governmental
activity. Thus, at the most general level, the due process nexus analysis
requires that we ask whether an individual's connections with a State are
substantial enough to legitimate the State's exercise of power over him. We
have, therefore, often identified "notice" or "fair warning" as the analytic
touchstone of due process nexus analysis. In contrast, the Commerce Clause, and
its nexus requirement, are informed not so much by concerns about fairness for
the individual defendant as by structural concerns about the effects of state
regulation on the national economy. Under the Articles of Confederation, State
taxes and duties hindered and suppressed interstate commerce; the Framers
intended the Commerce Clause as a cure for these structural ills. See generally
The Federalist Nos. 7, 11 (A. Hamilton). It is in this light that we have
interpreted the negative implication of the Commerce Clause. Accordingly, we
have ruled that that Clause prohibits discrimination against interstate
commerce, see,e. g., Philadelphia v. New Jersey, 437 U.S. 617 (1978), and bars
state regulations that unduly burden interstate commerce, see, e. g., Kassel v.
Consolidated Freightways Corp. of Del., 450 U.S. 662 (1981).
The Complete Auto analysis reflects these concerns about the national economy.
The second and third parts of that analysis, which require fair apportionment
and non discrimination, prohibit taxes that pass an unfair share of the tax
burden onto interstate commerce. The first and fourth prongs, which require a
substantial nexus and a relationship between the tax and State provided
services, limit the reach of State taxing authority so as to ensure that State
taxation does not unduly burden interstate commerce. [n.6] Thus, the
"substantial nexus" requirement is not, like due process' "minimum contacts"
requirement, a proxy for notice, but rather a means for limiting state burdens
on interstate commerce. Accordingly, contrary to the State's suggestion, a
corporation may have the "minimum contacts" with a taxing State as required by
the Due Process Clause, and yet lack the "substantial nexus" with that State as
required by the Commerce Clause. [n.7]
The State Supreme Court reviewed our recent Commerce Clause decisions and
concluded that those rulings signalled a "retreat from the formalistic
constrictions of a stringent physical presence test in favor of a more flexible
substantive approach" and thus supported its decision not to apply Bellas Hess.
470 N. W. 2d, at 214 (citing Standard Pressed Steel Co. v. Department of Revenue
of Wash., 419 U.S. 560 (1975), and Tyler Pipe Industries, Inc. v. Washington
State Dept. of Revenue, 483 U.S. 232 (1987)). Although we agree with the State
Court's assessment of the evolution of our cases, we do not share its conclusion
that this evolution indicates that the Commerce Clause ruling of Bellas Hess is
no longer good law.
First, as the State Court itself noted, 470 N. W. 2d, at 214, all of these cases
involved taxpayers who had a physical presence in the taxing State and therefore
do not directly conflict with the rule of Bellas Hess or compel that it be
overruled. Second, and more importantly, although our Commerce Clause
jurisprudence now favors more flexible balancing analyses, we have never
intimated a desire to reject all established "bright line" tests. Although we
have not, in our review of other types of taxes, articulated the same physical
presence requirement that Bellas Hess established for sales and use taxes, that
silence does not imply repudiation of the Bellas Hess rule.
Complete Auto, it is true, renounced Freeman and its progeny as "formalistic."
But not all formalism is alike. Spector's formal distinction between taxes on
the "privilegeof doing business" and all other taxes served no purpose within
our Commerce Clause jurisprudence, but stood "only as a trap for the unwary
draftsman." Complete Auto, 430 U. S., at 279. In contrast, the bright line rule
of Bellas Hess furthers the ends of the dormant Commerce Clause. Undue burdens
on interstate commerce may be avoided not only by a case by case evaluation of
the actual burdens imposed by particular regulations or taxes, but also, in some
situations, by the demarcation of a discrete realm of commercial activity that
is free from interstate taxation. Bellas Hess followed the latter approach and
created a safe harbor for vendors "whose only connection with customers in the
[taxing] State is by common carrier or the United States mail." Under Bellas
Hess, such vendors are free from state imposed duties to collect sales and use
Like other bright line tests, the Bellas Hess rule appears artificial at its
edges: whether or not a State may compel a vendor to collect a sales or use tax
may turn on the presence in the taxing State of a small sales force, plant, or
office. Cf. National Geographic Society v. California Bd. of Equalization, 430
U.S. 551 (1977); Scripto, Inc. v. Carson, 362 U.S. 207 (1960). This
artificiality, however, is more than offset by the benefits of a clear rule.
Such a rule firmly establishes the boundaries of legitimate state authority to
impose a duty to collect sales and use taxes and reduces litigation concerning
those taxes. This benefitis important, for as we have so frequently noted, our
law in this area is something of a "quagmire" and the "application of
constitutional principles to specific state statutes leaves much room for
controversy and confusion and little in the way of precise guides to the States
in the exercise of their indispensable power of taxation." Northwestern States
Portland Cement Co. v. Minnesota, 358 U.S. 450, 457-458 (1959).
Moreover, a bright line rule in the area of sales and use taxes also encourages
settled expectations and, in doing so, fosters investment by businesses and
individuals. [n.9] Indeed, it is not unlikely that the mail order industry's
dramatic growth over the last quarter century is due in part to the bright line
exemption from state taxation created in Bellas Hess.
Notwithstanding the benefits of bright line tests, we have, in some situations,
decided to replace such tests with more contextual balancing inquiries. For
example, in Arkansas Electric Cooperative Corp. v. Arkansas Pub. Serv. Comm'n,
461 U.S. 375 (1983), we reconsidered a bright line test set forth in Public
Utilities Comm'n of R. I. v. AttleboroSteam & Electric Co., 273 U.S. 83 (1927).
Attleboro distinguished between state regulation of wholesale salesof
electricity, which was constitutional as an "indirect" regulation of interstate
commerce, and state regulation of retail sales of electricity, which was
unconstitutional as a "direct regulation" of commerce. In Arkansas Electric, we
considered whether to "follow the mechanical test set out in Attleboro, or the
balance of interests test applied in our Commerce Clause cases." Arkansas
Electric Cooperative Corp., 461 U. S., at 390-391. We first observed that "the
principle of stare decisis counsels us, here as elsewhere, not lightly to set
aside specific guidance of the sort we find in Attleboro." Id., at 391. In
deciding to reject the Attleboro analysis, we were influenced by the fact that
the "mechanical test" was "anachronistic," that the Court had rarely relied on
the test, and that we could "see no strong reliance interests" that would be
upset by the rejection of that test. Id., at 391-392. None of those factors
obtains in this case. First, the Attleboro rule was "anachronistic" because it
relied on formal distinctions between "direct" and "indirect" regulation (and on
the regulatory counterparts of our Freeman line of cases); as discussed above,
Bellas Hess turned on a different logic and thus remained sound after the Court
repudiated an analogous distinction in Complete Auto. Second, unlike the
Attleboro rule, we have, in our decisions, frequently relied on the Bellas Hess
rule in the last 25 years, see supra, at 11, and we have never intimated in our
review of sales or use taxes that Bellas Hess was unsound. Finally, again unlike
the Attleboro rule, the Bellas Hess rule has engendered substantial reliance and
has become part of the basic framework of a sizeable industry. The "interest in
stability and orderly development of the law" that undergirds the doctrine of
stare decisis, see Runyon v. McCrary, 427 U.S. 160, 190-191 (1976) (Stevens, J.,
concurring), therefore counsels adherence to settled precedent.
In sum, although in our cases subsequent to Bellas Hess and concerning other
types of taxes we have not adopted a similar bright line, physical presence
requirement, our reasoning in those cases does not compel that we now reject the
rule that Bellas Hess established in the area of sales and use taxes. To the
contrary, the continuing value of a bright line rule in this area and the
doctrine and principles of stare decisis indicate that the Bellas Hess rule
remains good law. For these reasons, we disagree with the North Dakota Supreme
Court's conclusion that the time has come to renounce the bright line test of
This aspect of our decision is made easier by the fact that the underlying issue
is not only one that Congress may be better qualified to resolve, [n.10] but
also one that Congress has the ultimate power to resolve. No matter how we
evaluate the burdens that use taxes impose on interstate commerce, Congress
remains free to disagree with our conclusions. See Prudential Insurance Co. v.
Benjamin, 328 U.S. 408 (1946). Indeed, in recent years Congress has considered
legislation that would "overrule" the Bellas Hess rule. [n.11] Its decision not
to take action in this direction may, of course, have been dictated by respect
for our holding in Bellas Hess that the Due Process Clause prohibits States from
imposing such taxes, but today we have put that problem to rest. Accordingly,
Congress is now free to decide whether, when, and to what extent the States
mayburden interstate mail order concerns with a duty to collect use taxes.
Indeed, even if we were convinced that Bellas Hess was inconsistent with our
Commerce Clause jurisprudence, "this very fact [might] giv[e us] pause and
counse[l] withholding our hand, at least for now. Congress has the power to
protect interstate commerce from intolerable or even undesirable burdens."
Commonwealth Edison Co. v. Montana, 453 U.S. 609, 637 (1981) (White, J.,
concurring). In this situation, it may be that "the better part of both wisdom
and valor is to respect the judgment of the other branches of the Government."
Id., at 638.
The judgment of the Supreme Court of North Dakota is reversed and the case is
remanded for further proceedings not inconsistent with this opinion.
It is so ordered.