Rare Book Monthly

Articles - January - 2014 Issue

Courts Reach Contrary Decisions on Collection of Sales Tax by Out-of-State Retailers

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The U. S. Supreme Court building.

The confusion over which out-of-state companies must collect sales tax in which states was ratcheted up another level as a result of a recent U.S. Supreme Court non-decision. The Supreme Court declined to hear an appeal from New York's highest court from Amazon and Overstock, two major online merchants headquartered in another state. By so doing, it allowed the New York decision compelling certain out-of-state merchants to collect sales tax to stand. The added confusion arises from the fact that the New York decision the Supreme Court let stand was very different from one reached by Illinois' highest court just a few weeks earlier. Under similar circumstances, the Illinois court ruled Illinois could not require out-of-state merchants to collect their sales tax. Confusing enough?

 

It has long been established law that a state cannot require an out-of-state merchant to collect their sales tax unless that merchant has a presence in their state (“nexus” is the official term). This is based on the Constitution giving the federal government exclusive power to regulate interstate commerce. Generally, “nexus” was thought to mean some sort of physical presence – a store, warehouse, office, or something like that. Since most such retailers had a presence only in their home state, they could not be compelled to collect sales taxes for the other 49 states. That is why you rarely had to pay sales tax on something purchased via direct mail.

 

The states didn't much like this, but for years accepted the fact that out-of-state mail order companies could sell to their residents and not have to collect sales tax. However, the value of this lost revenue has increased tremendously over the past few years with the advent of internet sales. Today, there is much more at stake. So, the states began to look for new connections between out-of-state retailers and their states that they could claim to be sufficient “nexus” to require that retailer to collect their sales taxes. New York and Illinois both thought they found one.

 

Those states attempted to claim nexus based on the presence in their states of “affiliates,” persons who use their websites to send customers to the retailer's website. For example, a resident of New York might post a link on his/her website to Amazon in return for a commission on sales. The retailers do not look at these people as being a part of their business but as an independent outsider. Such a person does not create a presence by the company. The states passed legislation saying those persons are, in effect, part of the company and thereby make that company a state resident. Therefore, that out-of-state retailer, say Washington-based Amazon, must collect sales tax on sales made to residents of New York and Illinois.

 

In New York, the state's highest court agreed with their state's interpretation of “nexus” and demanded out-of-state retailers collect sales tax. Amazon and Overstock appealed to the U. S. Supreme Court. While the Supreme Court did not rule on the legality of New York's law, by declining to take up the case, they allowed that ruling to stand. The out-of-state merchants with in-state “affiliates” must collect their sales tax.

 

In Illinois, the state's highest court reached a different conclusion. While not looking at the traditional constitutional issue, the Illinois court ruled that this law violated the Internet Tax Freedom Act of 2000. That federal law prohibits discriminatory taxes on internet transactions. The Illinois court said that requiring taxes be collected because an out-of-state company was advertising on in-state people's internet sites, but not if it was advertising on in-state television stations or newspapers, was internet discriminatory. So, based on the same federal law, certain customers in Illinois aren't subject to collection of sales taxes while residents of New York are.

 

Obviously, this doesn't make much sense. However, the Supreme Court has shown a lack of interest in wading deeper into this issue. If balance is to be achieved, it is up to Congress to enact new laws clarifying the issue. A law has been passed by the Senate which would require all out-of-state retailers (maybe you too?) to collect sales taxes providing the merchant has over $1 million in sales annually. Currently the bill is languishing in the House of Representatives and it is questionable whether the House will act upon the bill or ignore it. The states are pressuring the House to vote yes. Many consumers and anti-tax advocates are encouraging their representatives to continue to ignore the bill. Right about now, it does not look like the House is in any great hurry to deal with an issue that many construe as amounting to a tax increase.

Rare Book Monthly

  • <center><b>iGavel Auctions<br>Antiquarian and Other Books<br>September 14 – October 12</b>
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Athanasius. <i>Illustrium Virorum Opuscula,</i> Paris, 1500. $4,000 to $6,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> <i>The New Testament of Jesus Christ, Translated Faithfully into English,</i> Rheims, John Fogny, 1582. $3,000 to $5,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Stith, William. <i>The First History of Virginia printed in America,</i> [Williamsburg, 1747]. $2,500 to $3,500.
    <center><b>iGavel Auctions<br>Antiquarian and Other Books<br>September 14 – October 12</b>
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b><br>S. Bonaventure. <i>Commentarius in Secundum Librum Sententiarum Petri Lombardi,</i> Venice, 1477. $2,000 to $4,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Juvenalis, Junii. <i>Satyrae,</i> with the commentary of Domitius Calderinus, Venice, 1475. $2,000 to $4,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Horatius Flaccus, Quintus. <i>Opera.</i> Ed. with commentary of Christophorus Landinus, Florence, 1482. $2,000 to $4,000.
    <center><b>iGavel Auctions<br>Antiquarian and Other Books<br>September 14 – October 12</b>
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Scotus, Duns. <i>Quaestiones in Quattuor Libros Sententiarum,</i> 1476-1477. $2,000 to $4,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Polidori, John. <i>The Vampyre, A Tale,</i> Paris, 1819. $1,000 to $2,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Stowe, Harriet Beecher. <i>Uncle Tom's Cabin,</i> Vol. I and II, 1852, and a Later Edition, 1885. $2,000 to $3,000.
    <center><b>iGavel Auctions<br>Antiquarian and Other Books<br>September 14 – October 12</b>
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Twain, Mark. <i>The Adventures of Tom Sawyer,</i> 1877 [and] <i>The Adventures of Huckleberry Finn,</i> 1885. $2,000 to $3,000.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> Book of Hours, Illuminated Vellum, Calendar of Months, 15th century. $600 to $900.
    <b>iGavel Auctions, Sep. 14 – Oct. 12:</b> <i>Picturesque,</i> America, Europe, Palestine, and Russia, 1872-1885. $400 to $600.
  • <b>Swann Auction Galleries:</b> C.F. Payne, <i>Micawber—Imitating Norman Rockwell's "Triple self-portrait,"</i> acrylic, watercolor & colored pencil, 2002. Sold June 2021 for $3,000.
    <b>Swann Auction Galleries:</b> Jane Russell, archive of letters written during a whaling voyage, 1840s. Sold July 2021 for $30,000.
    <b>Swann Auction Galleries:</b> Guild of Women Binders, exhibition binding of A.F. Pollard’s <i>Henry VIII,</i> London, 1902. Sold July 2021 for $12,350.
    <b>Swann Auction Galleries:</b> Robert Frost, <i>Collected Poems,</i> author’s presentation copy, signed, with entirety of <i>Stopping by Woods on a Snowy Evening</i> inscribed, NY, 1930. Sold June 2021 for $20,000.
    <b>Swann Auction Galleries:</b> James Joyce, <i>Ulysses,</i> deluxe limited issue, signed, London, 1936. Sold June 2021 for $21,250.
    <b>Swann Auction Galleries:</b> Mercator [family], <i>[World and Continents],</i> 5 double-page maps, Amsterdam, c. 1633. Sold June 2021 for $15,000.
    <b>Swann Auction Galleries:</b> George Schlegel, <i>New York, Taken from Central Park,</i> hand-finished color-tinted lithograph, 1874. Sold June 2021 for $11,250.
    <b>Swann Auction Galleries:</b> Nicolaus Copernicus, <i>De Revolutionibus Orbium Coelestium,</i> second edition, Basel, 1566. Sold April 2021 for $75,000.
    <b>Swann Auction Galleries:</b> Book of Hours, Use of Utrecht, illuminated manuscript, c. 1435-45. Sold April 2021 for $60,000.
  • <b><center>Forum Auctions<br>Fine Books, Manuscripts<br>& Works on Paper<br>30th September 2021</b>
    <b>Forum Auctions, Sep. 30:</b> Bible, English. The Holy Bible, Second Folio edition, the "Great She Bible", engraved More-Speed 1611 map of Canaan, Robert Barker, 1613-11. £7,000 to £10,000.
    <b>Forum Auctions, Sep. 30:</b> Galilei (Galileo). <i>Opere,</i> 2 vol., first collected edition, Bologna, Heirs of Dozza for Carlo Manolessi, 1656-1655. £4,000 to £6,000.
    <b>Forum Auctions, Sep. 30:</b> Venetian choirbook.- Single leaf from a 13th century Venetian antiphonal, with large decorated initial, manuscript on vellum, Venice, [c.1260]. £6,000 to £8,000.
    <b><center>Forum Auctions<br>Fine Books, Manuscripts<br>& Works on Paper<br>30th September 2021</b>
    <b>Forum Auctions, Sep. 30:</b> Petrarca (Francesco). <i>Rerum vulrgarium fragmenta,</i> decorated manuscript on paper, Italy, [second half of the 15th century]. £8,000 to £12,000.
    <b>Forum Auctions, Sep. 30:</b> New York School of abstract expressionists.- Abbott (Mary Lee). [Sketch book of original artwork], [New York], 1945. £5,000 to £7,000.
    <b>Forum Auctions, Sep. 30:</b> Contemporary colouring.- Nitzschewitz (Hermannus). <i>Novum beatae Mariaevirginis psalterium,</i> Zinna, Press of the Cistercian Monastery, 1493. £4,000 to £6,000.
    <b><center>Forum Auctions<br>Fine Books, Manuscripts<br>& Works on Paper<br>30th September 2021</b>
    <b>Forum Auctions, Sep. 30:</b> Shakespeare source book.- Montemayor (Jorge de). Diana of George of Montemayor: translated out of Spanish into English by Bartholomew Yong, first edition in English, B[ishop]., 1598. £6,000 to £8,000.
    <b>Forum Auctions, Sep. 30:</b> Milton (John). Poems of Mr. John Milton, Both English and Latin, Compos'd at several times, first edition, state with "S" in "S. Pauls" in imprint, 1645. £12,000 to £18,000.
    <b>Forum Auctions, Sep. 30:</b> Greene (Graham). <i>The Power and the Glory,</i> first edition, 1940. £6,000 to £8,000.
    <b><center>Forum Auctions<br>Fine Books, Manuscripts<br>& Works on Paper<br>30th September 2021</b>
    <b>Forum Auctions, Sep. 30:</b> Crowley (Aleister). View of the Tyrrhenian Sea, probably from the hill behind the abbey of Thelema, Cefalù, Sicily, charcoal, [1921]. £10,000 to £15,000.
    <b>Forum Auctions, Sep. 30:</b> Fleming (Ian). <i>Casino Royale,</i> first edition, 1953. £12,000 to £18,000.
    <b>Forum Auctions, Sep. 30:</b> China.- Thomson (John). <i>Illustrations of China and Its People,</i> 4 vol., first edition, 96 photographic plates, 1873-74. £15,000 to £20,000.
  • <b><center>Doyle<br>Rare Books, Autographs & Maps<br>September 23, 2021</b>
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 20. ADAMS, JOHN QUINCY. Letter to the editors of the Boston Atlas on slavery and its political ramifications, 1842. $20,000 to $30,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 208. HEMINGWAY, ERNEST. <i>A Farewell To Arms.</i> New York: Charles Scribner's Sons, 1929. First edition. $2,000 to $3,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 237. ADDAMS, CHARLES. Original drawing "Now Remember-act casual." $5,000 to $7,000.
    <b><center>Doyle<br>Rare Books, Autographs & Maps<br>September 23, 2021</b>
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 4. SMITH, ADAM. <i>An inquiry into the nature and causes of the wealth of nations.</i> Philadelphia, 1789. The first American edition. $4,000 to $6,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 131. BEETHOVEN, LUDWIG VON. <i>Cinquieme Sinfonie en ut mineur: C Moll de Louis Van Beethoven. Oeuvre 67.</i> First edition of the complete score. $3,000 to $5,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 73. Chinese Export Painting. Album of twenty-three original Chinese natural history studies of flowers and insects. Likely Canton: circa 1850. $2,000 to $3,000.
    <b><center>Doyle<br>Rare Books, Autographs & Maps<br>September 23, 2021</b>
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 241. GOREY, EDWARD. Original drawing "Cat Drawing Wallpaper." Signed in Pencil in lower right margin. $2,000 to $4,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 36. LINCOLN, ABRAHAM. Autograph note signed instructing Edwin Stanton to meet with the important African American abolitionist and officer Martin Delany. [Washington:] 21 February 1865. $8,000 to $12,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 112. JONSON, BEN. <i>Workes</i>. London: William Stansby, 1616; Together with <i>Workes.</i> London: Richard Meighen,1640-41. $7,000 to $10,000.
    <b>Doyle, Rare Books, Autographs & Maps:</b> Lot 161. STURGIS, LEE. <i>Salmon Fishing on Cain River, New Brunswick.</i> (Chicago:) Privately printed (for the author by Ralph Fletcher Seymour), 1919. First edition. $3,000 to $5,000.

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