Yesterday Kylie Oversen, the North Dakota Democratic Party’s candidate for Tax Commissioner, posted a press release urging the U.S. Supreme Court to overturn the Quill vs. North Dakota precedent which limits states to applying the sales tax only to entities with a physical presence within their borders.
Quill was actually litigated by then-Tax Commissioner Heidi Heitkamp, and dealt with a catalog company making sales in North Dakota. That company didn’t want to collect North Dakota sales tax because it didn’t have a physical presence in North Dakota. The early 1990’s iteration of the Supreme Court agreed, and with the emergence of online retail that precedent has blocked states from collecting sales taxes from online sales from companies without a brick-and-mortar presence there.
Now there is a challenge to Quill in the form of South Dakota vs. Wayfair, Inc. Many see the current Supreme Court, operating in a much different economic reality from their 1992-era counterparts, as possibly abrogating Quill.
I’m not sure why the Supreme Court should. Central to the Quill case is the U.S. Constitution’s commerce clause which prohibits states from regulating interstate commerce. Unless there’s been some amendment to that part of the Constitution I’m not aware of it seems to me the Quill precedent should stand. Particularly since the Constitution’s prohibition on states regulating interstate commerce is pretty important to North Dakota.
Remember when our state won a victory over Minnesota’s attempt to restrict North Dakota coal-fired electricity? A new precedent diminishing the commerce clause could have some unexpected ramifications for states like North Dakota which export a lot of products – from agriculture to oil to electricity – far beyond our borders.
But I digress. At issue today is Oversen blatantly mischaracterizing incumbent Tax Commissioner Ryan Rauschenberger’s position on this issue. Her press release accuses Rauschenberger of falling “on the side of major out-of-state corporations.”
The problem? Rauschenberger has the same position Oversen does on this issue. He also supports overturning Quill and allowing states like North Dakota to enforce the sales tax on online sales even of companies without a physical presence in our state.
In a release sent out yesterday (see below) Rauschenberger argued that North Dakota is missing out on an estimated $50 million per year in tax collections because of Quill:
Did Oversen purposefully mislead the public about her opponent’s position? Did she maybe not take the time to actually understand what that position is, and just assume that it was the opposite of hers?
I think they’re both wrong. I worry that overturning Quill will weaken the commerce clause and open the door to other states pushing their laws and regulations into North Dakota.
At the very least, though, Oversen should engage Rauschenberger on honest terms.
I have reached out to Oversen for an interview but haven’t yet heard back.
[scribd id=376714746 key=key-GSnmVTU5yzFvRmwoyKuv mode=scroll]