Search Law SchoolSearch CornellLII / Legal Information InstituteSupreme Court collectionNOTICE: This opinion is subject to formal revision before publication inthe preliminary print of the United States Reports. Readers are requestedto notify the Reporter of Decisions, Supreme Court of the United States,Wash ington, D.C. 20543, of any typographical or other formal errors, inorder that corrections may be made before the preliminary print goes topress.SUPREME COURT OF THE UNITED STATESNo. 91-194QUILL CORPORATION, PETITIONER v. NORTH DAKOTA by and through its TAX COMMISSIONER,HEIDI HEITKAMPON WRIT OF CERTIORARI TO THE SUPREME COURT OF NORTH DAKOTA[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 "thetremendous social, economic, commercial, and legal innovations" of the past quarter centuryhave 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. Whilewe 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 inthat State is either insignificant or nonexistent.[n.1]Quill sells office equipment and supplies; itsolicits business through catalogs and flyers, advertisements in national periodicals, andtelephone calls. Its annual national sales exceed $200,000,000, of which almost $1,000,000 aremade to about 3,000 customers in North Dakota. It is the sixth largest vendor of office suppliesin the State. It delivers all of its merchandise to its North Dakota customers by mail or commoncarrier from out of state locations.As a corollary to its sales tax, North Dakota imposes a use tax upon property purchased forQuill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992).Other[ White ]Concurrence[ Scalia ]SyllabusOpinion[ Stevens ]HTML versionWordPerfect versionHTML versionWordPerfect versionHTML versionWordPerfect versionHTML versionWordPerfect versionPage1of9Quill Corp. v. North Dakota, 504 U.S. 298 (1992).10/31/2007http://supct.law.cornell.edu/supct/html/91-0194.ZO.htmlstorage, use or consumption within the State. North Dakota requires every "retailer maintaininga 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 statutorydefinition of the term "retailer" to include "every person who engages in regular or systematicsolicitation of a consumer market in th[e] state." § 57-40.2-01(6). State regulations in turndefine"regular or systematic solicitation" to mean three or more advertisements within a 12month period. N. D. Admin. Code § 81-04.1-01-03.1 (1988). Thus, since 1987, mail ordercompanies that engage in such solicitation have been subject to the tax even if they maintainno property or personnel in North Dakota.Quill has taken the position that North Dakota does not have the power to compel it to collect ause tax from its North Dakota customers. Consequently, the State, through its TaxCommissioner, 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 caseindistinguishable from Bellas Hess; specifically, it found that because the State had not shownthat it had spent tax revenues for the benefit of the mail order business, there was no "nexus toallow 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 theeconomy 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 orderbusiness "from a relatively inconsequential market niche" in 1967 to a "goliath" with annual salesthat reached "the staggering figure of $183.3 billion in 1989." Id., at 208, 209. Moreover, thecourt observed, advances in computer technology greatly eased the burden of compliance witha " `welter of complicated obligations' " imposed by state and local taxing authorities. Id., at215 (quoting Bellas Hess, 386 U. S., at 759-760).Equally important, in the court's view, were the changes in the "legal landscape." With respectto the Commerce Clause, the court emphasized that Complete Auto Transit, Inc. v. Brady, 430U.S. 274 (1977), rejected the line of cases holding that the direct taxation of interstatecommerce 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. Commissionerof 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 nexussuggested in Bellas Hess.Similarly, with respect to the Due Process Clause, the North Dakota court observed that casesfollowing Bellas Hess had not construed "minimum contacts" to require physical presence withina State as a prerequisite to the legitimate exercise of state power. The State Court thenconcluded that "the Due Process requirement of a `minimal connection' to establish nexus isencompassed within the Complete Auto test" and that the relevant inquiry under the latter testwas whether "the state has provided some protection, opportunities, or benefit for which it canexpect a return." 470 N. W. 2d, at 216.Turning to the case at hand, the State Court emphasized that North Dakota had created "aneconomic climate that fosters demand for" Quill's products, maintained a legal infrastructurethat protected that market, and disposed of 24 tons of catalogs and flyers mailed by Quill intothe 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 Stateand therefore generated "a constitutionally sufficient nexus to justify imposition of the purelyadministrative 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 statesellers, our holding in Bellas Hess relied on
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