Alabama Challenges Physical Presence Nexus Requirement

Friday, June 17th, 2016

 
 
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Newegg, Inc., a large online retailer, has filed an appeal in the Alabama Tax Tribunal challenging Alabama's nexus regulation. The regulation requires large out-of-state retailers to collect and remit sales tax even if they do not have a physical presence in the state.

The regulation conflicts with the U.S. Supreme Court's decision in Quill v. North Dakota, which requires that businesses have a physical presence in a state before that state can require them to collect sales tax.

The appeal could provide the U.S. Supreme Court with an opportunity to revisit Quill in light of the significant changes in online retail in recent years. The Revenue Commissioner has said that Alabama intends to "lead the charge to overturn Quill."

http://revenue.alabama.gov/news/06152016.pdf


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