Rethinking Tax Nexus and Apportionment: Voice, Exit, And the Dormant Commerce Clause‪.‬

1. INTRODUCTION Few have kind words for the constitutional requirement that states may only tax persons with physical presence within the taxing state. In Quill Corporation v. North Dakota, the U.S. Supreme Court, affirming the physical presence test for at least some dormant Commerce Clause purposes, held that the states lack tax nexus to out-of-state mail order sellers. (1) States accordingly cannot impose upon such sellers the obligation to collect use taxes. The precise contours of Quill and its physical presence requirement remain unclear. Many courts and commentators have criticized that requirement. (2) The physical presence test for tax nexus is, we are told, an anachronism in a modern economy, an artifact of an earlier time begrudgingly perpetuated by the Court in a misguided application of stare decisis.