Bradley Partner Bruce Ely Quoted in State Tax Notes on Alabama’s Challenge to Online Sales Tax Regulation

Bradley attorney Bruce Ely was quoted in State Tax Notes on a case challenging the Alabama Department of Revenue's "economic nexus" rule on remote sales tax collection. In Newegg Inc. v. Alabama Department of Revenue, the online electronics retailer filed suit against the ADOR over an administrative rule requiring out-of-state sellers to collect and remit use tax on sales of tangible personal property into the state if they have a certain amount of sales into the state. The department asked the Tax Tribunal to hold Newegg’s appeal in abeyance until after the U.S. Supreme Court addresses the taxation of remote sellers that lack a physical presence. However, the tribunal determined without ruling on the constitutionally of Quill Corp. v. North Dakota that it would be unnecessary to wait for a ruling in Wayfair. It found that the ADOR failed to correctly apply its administrative rule in this case.

Ely explained that he had expected the tribunal to wait until the court’s Wayfair ruling. “The timing of the ruling came as a bit of a surprise to us, since most of us expect a ruling by the Supreme Court in Wayfair by the end of June,” Ely said. “But it gives us a good glimpse into Chief Judge Patterson’s thinking about the department’s economic nexus regulation, and certainly seems to undercut their attempt to use the regulation to challenge Quill.”

The complete article, “Challenge to Alabama Online Sales Tax Statute Will Proceed,” appeared in State Tax Notes on May 15, 2018. (login required)