Interstate Commerce

of an opinion's volume of citations to precedent, and their respective network centrality. Why do Justices cite cases in their opinions? Why do they choose particular citations to include in those opinions? No case is exactly identical to prior cases, conclusively governed by particular past opinions, and the Supreme Court selects the most difficult cases for resolution, so considerable discretion is necessary in evaluating the significance of prior precedents for its decisions. There are never truly binding, vertical precedents at the Supreme Court level, and the Justices occasionally even overturn their prior precedents. Justices reach very different conclusions about the correct disposition of a particular case, even though the precedents they consider are identical, and they occasionally accuse one another of manipulating or ignoring important precedent. In this Article, we provide an empirical analysis of the Justices' citation practices to assess why Justices cite cases in their opinions, how they differ, and how those decisions matter for the practical development of the law. And what are the implications of those citation choices? The facile answer-they mechanistically base their decisions entirely on the best applicable precedentscannot be sustained in its strongest version. Different Justices clearly make different citation choices, and the cases emphasized by a dissenting opinion may be quite different than those relied upon in the majority opinion. Citations function something like the currency of the legal system. An opinion's references to authoritative legal materials, most often the Court's own prior decisions, form the fundamental justification for a judicial decision. Of all citations, those to prior opinions are the most common, demonstrating the Court's respect for stare decisis. 2 The doctrine of stare decisis is said to reflect "the fundamental values of the legal process." 1. An early law review article observed that "[t]he reader of a judicial opinion seldom finds any clear indication of the reasons for citation of authorities in it." John Henry Merryman, The Authority of Authority: What the California Supreme Court Cited in 1950, 6 STAN. L. REV. 613, 614 (1954) [hereinafter Merryman, Authority of Authority]. The citations in opinions have "great practical and theoretical importance," but our understanding of citation practice has not advanced much since this time.

In Gibbons v. Ogden, Chief Justice John Marshall famously wrote that "the enumeration presupposes something not enumerated. " Modern courts use that phrase to mean that the Constitution's enumeration of congressional powers indicates that those powers are, as a whole, less than a grant of genera/legislative authority. But Marshall wasn't saying that. He wasn't talking about the Constitution's overall enumeration of congressional powers at all. He was writing about a different enumeration~the enumeration of three classes of commerce within the Commerce Clause. And Marshall's analysis of the Commerce Clause in Gibbons does not imply that the enumerated powers of Congress must in practice authorize less legislation than a grant of genera/legislative authority would.

Nationally, internet commerce amounts to trillions of dollars of sales per year, and business and consumer purchases from internet retailers are increasing rapidly. However, Pennsylvania has a limited ability to compel remote vendors without a physical presence in Pennsylvania to collect and remit sales and use taxes for internet transactions, 1 and for 2012, it is estimated that such uncollected revenues range from $254 to $410 million for Pennsylvania. In addition to this uncollected revenue and its obvious impact on the Commonwealth's finances, the non-collection of sales taxes by some internet retailers shifts sales away from tax-collecting retailers, which importantly includes in-state brick-and-mortar stores. The lower sales for brick-and-mortar stores in turn reduces the economic impact of these stores on the rest of Pennsylvania. If all internet retailers were required to collect sales tax, placing them on equal footing with taxcollecting retailers, it would increase tax receipts to Pennsylvania, and increase sales at brickand-mortar stores. Impact on Pennsylvania's finances -The primary impact on the Pennsylvania treasury is through the loss of uncollected sales tax, and the secondary impact is through lower employment and other taxes because of decreased business at in-state brick-and-mortar stores. Requiring the collection of sales and use taxes would increase tax collections by the Department of Revenue significantly, even though it would decrease overall purchases slightly, thereby decreasing the tax base. It would also likely take time for retailers to come into compliance. Estimates for the potential amount of revenue that could be collected in 2012, if shopping patterns changed

precedent, incoherent as policy, and the product of a backward looking, politicized commitment to a laissez faire economy. 9 This paper challenges those claims. It argues that this conventional understanding is wrong in at least three respects: (1) it underestimates the coherence of the Court's federal police power as it developed from Champion to Hammer; (2) it mischaracterizes the policies that produced the harmless items limit; and (3) it ignores the central role lawyers outside the Supreme Court played in shaping early federal police power doctrine. Given the prominent place of Hammer in the canon of constitutional law, 10 and the central role it plays in supporting a contested understanding of the Lochner Court, those errors threaten to distort the profession's understanding of constitutional development. 11

Following the 1906 midterm elections, Indiana Senator Albert Beveridge was excited to return to Washington to introduce a bill that would prohibit child labor in the nation's factories, mines, and mills. He hoped the bill would curtail the unpopular practice and help rebrand his Republican Party as the nation's progressive party. The Party's old guard, however, proved uncooperative. Recognizing the unpopularity of child labor, they fought the bill on constitutional grounds and challenged Beveridge with a parade of horribles. If Congress could constitutionally regulate child labor, they asked, could it not also regulate the hours or wages of adults? Could it not prevent a man from joining a labor union? Or require it? One would have expected Beveridge-who opposed such regulations-to blunt that criticism with some legal distinction. Instead, he embraced it. Would Beveridge go so far as to claim that Congress could prohibit the interstate shipment of cotton picked by children, asked one Senator. "Yes," Beveridge retorted, "or [by] a redheaded girl." 1

The distinction between holding and dictum is often treated under a binary paradigm; either a proposition is binding holding, or unconstraining dictum. But the binary paradigm is too simplistic to adequately model our complex system of precedent. This article suggests an alternative spectrum paradigm where the constraining force of a precedent proposition is inversely correlated with its breadth. This article explains the spectrum approach, compares it with prevailing approaches, and evaluates some cases in light of the spectrum model. The spectrum framework has the potential to facilitate judicial candor and make the concepts of holding and dicta more consistently meaningful. * Visiting Associate Professor of Law and Frank H. Marks Intellectual Property Fellow, George Washington University Law School. J.D., NYU School of Law, 2010. The author thanks Michael Abramowicz, Robert Brauneis, Rochelle Dreyfuss, Dmitry Karshtedt, Stephen Klein, Pierre Schlag, Ralph Steinhardt, John Whealan...

The distinction between dictum and holding is at once central to the American legal system and largely irrelevant. In the first systematic empirical study of lower court invocations of the distinction, we show that lower courts hardly ever refuse to follow a statement from a higher court because it is dictum. Specifically, federal courts of appeals meaningfully invoke the distinction in about 1 in 4000 cases; federal district courts in about 1 in 2000 cases; and state courts in about 1 in 4000 cases. In this Essay, we report these findings, describe our coding system, and offer a preliminary assessment of the implications of our study. Most notably, our findings raise questions about the vitality of traditional common law judging. Rather than play a significant role in the development of legal principles by treating extraneous statements in higher court rulings as nonbinding dicta, lower courts cede much of their common law power to higher courts. Higher courts can issue sweeping ru...

The growth in e-commerce has dramatically altered U.S. business practices in ways that erode states' ability to collect sales taxes. States have attempted to reclaim the sales tax base but are constrained by current nexus rules that allow firms to choose whether to establish taxability based on a decision to establish physical presence. We examine how state tax policies affect the propensity of firms to establish nexus in each state. We find that firms are more likely to have nexus in large states, and that the effect of policy on nexus decisions appears to be relatively immediate and a function of current sales tax rates and base breadth. Employment rises with nexus in states where the sales tax is low.

for encouragement and suggestions. l. The Constitution lists, in great detail, powers of the federal legislature in Article 1, Section 8, suggesting that such powers are limited to those listed. U.S. CoNsT. art. I, § 8. Chief justice Marshall, in McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819), stated that such a limitation was a premise of the Constitution: This government is acknowledged by all, to be one of enumerated powers. The principle, that it can exercise only the powers granted to it, would seem too apparent, to have required to be enforced by all those arguments, which its enlightened friends, while it was depending before the people, found it necessary to urge; that principle is now universally admitted. But the question respecting the extent of the powers actually granted, is perpetually arising, and will probably continue to arise, so long as our system shall exist. ld. at 405; see also United States v. Lopez, 514 U.S. 549, 566 (1995) (stating that the authority of Congress "is limited to those powers enumerated in the Constitution ... "); THE FEDERALIST No. 45, at 292 Uames Madison) (Clinton Rossiter ed., 1961) (stating that the powers of the federal government are "few and defined," those of the states "numerous and indefinite"). 2. The requirement is no more than that it be reasonably implied from specific grants of power. In this respect McCulloch is the foundational case holding that the structure of the Constitution and its Necessary and Proper Clause, U.S. CoNsT. art. I, § 8, cl. 18, demonstrate that Congress must have those subsidiary powers plainly adapted to exercising the powers that are listed. McCulloch, 17 U.S. (4 Wheat.) at 421. 3. For cases vastly expanding Congress's powers under the Commerce Clause during this era, see Katumbach v. McClung, 379 U.S. 294 (1964) (holding that Congress acted within its power under the Commerce Clause when it extended coverage of Title II to include restaurants serving food that had moved in interstate commerce); Wickard v. Fitbum, 317 U.S. 111 (1942) (holding that Congress may regulate even trivial contributions to

Thirty-nine states' have price affirmation laws or policies requiring liquor distillers to sell to wholesalers within the state "at a price that is no higher than the lowest price the distiller charges wholesalers anywhere else in the United States. ' 2 These laws come in two forms. Retrospective price affirmation regulations require distillers to affirm that the prices charged in the state today (or in some future period) will be no higher than the lowest prices charged in any other state in some past period. Prospective price affirmation regulations require distillers to affirm that the prices charged in the state now will be no higher than the lowest prices charged in any other state in some future period.' Price affirmation laws have been constitutionally challenged by distillers as burdens on interstate commerce. In 1966, a retrospective affirmation law survived the first such challenge in the Supreme Court, Joseph E. Seagram & Sons, Inc. v. Hostetter. 4 Twenty years later, however, the same court declared a prospective law unconstitutional in Copyright 1988, by LOUISIANA LAW REVIEW.

The centerpiece of President Bush's crimefighting program is an initiative called Project Safe Neighborhoods. That initiative calls for the hiring of some 700 lawyers who will be dedicated to prosecuting firearm offenses, such as the unlawful possession of a gun by a drug user or a convicted felon. The basic idea is to divert firearm offenses from state court, where they would ordinarily be prosecuted, to federal court, where tougher prison sentences will be meted out. Project Safe Neighborhoods will also provide funding to escalate gun prosecutions at the state level. Praise for Project Safe Neighborhoods comes from quarters as diverse as Handgun Control, Inc. and the National Rifle Association. Unfortunately, those disparate parties have united in support of a singularly bad idea. Project Safe Neighborhoods is an affront to the constitutional principle of federalism. The initiative flouts the Tenth Amendment by relying on federal statutes that have no genuine constitutional ba...

fighting program is an initiative called Project Safe Neighborhoods. That initiative calls for the hiring of some 700 lawyers who will be dedicated to prosecuting firearm offenses, such as the unlawful possession of a gun by a drug user or a convicted felon. The basic idea is to divert firearm offenses from state court, where they would ordinarily be prosecuted, to federal court, where tougher prison sentences will be meted out. Project Safe Neighborhoods will also provide funding to escalate gun prosecutions at the state level. Praise for Project Safe Neighborhoods comes from quarters as diverse as Handgun Control, Inc. and the National Rifle Association. Unfortunately, those disparate parties have united in support of a singularly bad idea. Project Safe Neighborhoods is an affront to the constitutional principle of federalism. The initiative flouts the Tenth Amendment by relying on federal statutes that have no genuine constitutional basis. Moreover, the program will very likely l...

1. THE FEDERALIST NO. 33, at 172 (Alexander Hamilton) (E.H. Scott ed., 1898). On the clause as a source of anti-ratification sentiment, see ALEXANDER HAMILTON ET AL., THE FEDERALIST: WITH LETTERS OF "BRUTUs" 149 (Terence Ball ed., 2003). On the founding generation's name for the Necessary and Proper Clause, see GARY LAWSON & GUY SEIDMAN, THE CONSTITUTION OF EMPIRE: TERRITORIAL EXPANSION AND

The distinction between dictum and holding is at once central to the American legal system and largely irrelevant. In the first systematic empirical study of lower court invocations of the distinction, we show that lower courts hardly ever refuse to follow a statement from a higher court because it is dictum. Specifically, federal courts of appeals meaningfully invoke the distinction in about 1 in 4000 cases; federal district courts in about 1 in 2000 cases; and state courts in about 1 in 4000 cases. In this Essay, we report these findings, describe our coding system, and offer a preliminary assessment of the implications of our study. Most notably, our findings raise questions about the vitality of traditional common law judging. Rather than play a significant role in the development of legal principles by treating extraneous statements in higher court rulings as nonbinding dicta, lower courts cede much of their common law power to higher courts. Higher courts can issue sweeping ru...

For over half a century, states were unjustly deprived access to a significant portion of their tax bases due to Supreme Court precedent that was dated since its very inception. South Dakota v. Wayfair, Inc. righted this wrong by granting states the power to lay taxes on out-of-state businesses that actively solicit sales from in-state customers. For decades the judiciallycreated physical presence rule prevented states from collecting sales taxes on these transactions, moving tens of billions of tax dollars out of reach. The rule lead to exploitation by businesses at states' expense. Aside from its detrimental effect, this rule has always been bad law. The constitutional principles and jurisprudence applied to adopt this rule were taken from outdated and rejected Supreme Court opinions that had no place at the physical presence rule's inception, and certainly have no place today. The Court's focus on this rule's effect represents a return to constitutional form through its rejection of hyper-formal distinctions and embrace of practical considerations.

The European Community and many other major trading partners, such as Mexico, incorporate the Value Added Tax (VAT) as the centerpiece of their tax systems. See intra notes 53-80 and accompanying text. Canada, Australia, New Zealand have a "Goods and Services Tax" (GST) that operates similar to a VAT.

The U.S. Constitution was written with the market revolution in England in mind, in which the power of the Crown to establish economic monopolies, then known generally as patents, was severely restricted by the 1624 Statute of Monopolies. The patent power then was a very general power to intervene in commerce and allocate markets. Thus, the commerce clause, the patent clause, and the welfare language have a common origin. Following the 1624 Parliament’s precedent, the Constitution gives the federal government only the highly restricted patent power that we know today by that name. This result implies that much of the commerce power as currently understood was specifically proscribed. These arguments suggest that much current federal economic regulation requires exercise of a general patent power that the federal government does not possess, and may thus be unconstitutional.

In Gibbons v. Ogden, Chief Justice John Marshall famously wrote that "the enumeration presupposes something not enumerated. " Modern courts use that phrase to mean that the Constitution's enumeration of congressional powers indicates that those powers are, as a whole, less than a grant of genera/legislative authority. But Marshall wasn't saying that. He wasn't talking about the Constitution's overall enumeration of congressional powers at all. He was writing about a different enumeration~the enumeration of three classes of commerce within the Commerce Clause. And Marshall's analysis of the Commerce Clause in Gibbons does not imply that the enumerated powers of Congress must in practice authorize less legislation than a grant of genera/legislative authority would.

The budget and taxes dominated Washington's 2010 legislative agenda. The Democrat-led legislature had to close a $2.8 billion shortfall for the 2009-2011 biennium. Unable to resolve debate on a mixture of program cuts and revenue enhancements, the legislature concluded its 60-day regular session without a budget and tax package. At the end of a 30-day special session, the legislature enacted a budget that filled the gap through a combination of new taxes, the cancelation of some tax incentives, spending cuts, and federal aid.

Louis of®ce of Bryan Cave LLP where his practice centres on federal and state tax litigation. He is a member of the American Bar Associate Tax Section, principally in committees that relate to tax litigation. He is also the head of the Bryan Cave LLP Tax Controversy Client Service Group.

Budgetary difficulties in 1985 led the Idaho Legislature to adopt special fiscal measures. They included Agency appropriation cuts and a 14-month one-cent increase in the state sales tax. Similar steps had previously been taken in 1983. Data including the 1983 temporary tax hike period are analyzed to gauge the effectiveness and potential effects of the 1985 legislation. Structural econometric, univariate ARIMA, and cross section statistical tests indicate that Idaho consumers delay purchases in anticipation of sales tax rate reductions.

From 1824 to 1838, the year when the federal government first passed regulations governing steamboat safety, fifteen steamboat boilers exploded killing seventy-two persons within New York waters. From the start of the steamboat monopoly operations in New York under Robert Fulton in 1807 until 1824, only three steamboat boilers exploded, claiming five lives. This sharp rise in explosions and loss of life can be directly traced to the 1824 U.S. Supreme Court landmark decision Gibbons v. Ogden. The fallout from the decision on New York State, with the accumulation of deaths and serious injuries resulting from steamboat racing, collisions, and, especially, boiler explosions through the mid-19th nineteenth century after the end of the Fulton steamboat monopoly, has largely been forgotten.

Cadwallader D. Colden and Thomas Addis Emmet could not help but practice intellectual property law: Robert Fulton was their client. Yet their engagement with the subject went far beyond what professional expediency demanded. Their transatlantic backgrounds and careers encouraged their affinity for liberal political economy and for entrepreneurial adventure. On the frontier, in the shadowy zones between early-nineteenth-century empires and land speculations, the line between enterprise and piratical intrigue was easily leapt, and Colden and Emmet were involved in the era's cross-border confusions. More typically, their work anticipated a world where private business and public improvement were managed in tandem, by interested franchisees, and underwritten by more sophisticated financial arrangements. The defense of Fulton's patent privileges was an unabashed apology for banks, corporations, and wealth. These lawyers celebrated canals and steamboats and argued that such tangible achievements were impossible without a flexible understanding of property. Their practice was bound up in the franchise model of development and reconciled government patronage with what was then, and is still, a controversial and liberal vision of progress. Robert Fulton—and Fulton's adversaries—kept his lawyers busy. His was an ambitious enterprise, and it provoked an aggressive understanding of intellectual property. Cadwallader D. Colden and Thomas Addis Emmet were Fulton's counselors, good friends, and, in Colden's case, sometime partners. They rose to the tasks Fulton presented and, indeed, often rose beyond them, though in such a way as to suggest the challenges and opportunities of the time rather than any extraordinary gifts or insights by which these were met. Ambition itself was subject to new styles of organization and articulation. Colden and Emmet were deeply involved in the schemes of the young republic's promiscuously multiplying corporations. So, too, were most established lawyers. What distinguished these two was the ease with which they mixed their claims on behalf of intangible property rights (and, as a corollary, rights of priority and management to certain broadly beneficial but narrowly profitable processes) with a celebratory and thrusting approach to financial adventure, to the speculative and, yes, intellectual impulse at the core of capital formation.

The petitioner in this case has framed the question presented as follows: “Whether the Tax Injunction Act bars federal court jurisdiction over a suit brought by non-taxpayers to enjoin the informational notice and reporting requirements of a state law that neither imposes a tax, nor requires the collection of a tax, but serves only as a secondary aspect of state tax administration.”

Amici agree with the respondent, the State of Colorado, that the Tax Injunction Act bars federal courts from enjoining the operation of the Colorado Statute at issue in this case because this lawsuit is intended to create the very kind of premature federal court interference with the operation of the Colorado use tax collection system that the TIA was designed to prevent. To assist the Court in understanding the application of the TIA to this case, amici (i) place the reporting requirements mandated by the Colorado Statute in the broader context of tax administration and (ii) explain the potential interaction between a decision on the TIA issue in this case and the underlying dispute concerning the dormant Commerce Clause.

Third-party reporting of tax information is a ubiquitous and longstanding feature of modern tax systems. When tax authorities rely on taxpayers to self-report their taxable activities, compliance rates for the collection of any tax is low. Like all states with a sales tax, Colorado faced – and faces – a voluntary compliance problem with the collection of its use tax. The use tax is a complement to the sales tax; in-state vendors collect and remit the sales tax, while in-state consumers are responsible for remitting the use tax on purchases made from out-of-state vendors that do not collect the sales tax. To this compliance challenge, Colorado turned to a third-party reporting solution. In broad strokes, the Colorado Statute imposes a modest requirement on one party to a taxable transaction – specifically on relatively large retailers who do not collect the use tax - to report information on their Colorado sales both to the consumer/taxpayer and to the taxing authorities.

Amici law professors contend that the centrality of third-party reporting to tax administration in general, and its aptness for this problem in particular, indicate that enjoining the operation of the Colorado Statute constitutes “restrain[ing] the assessment, levy or collection” of Colorado’s use tax.

Amici also observe, however, that even a narrow ruling on the scope of the TIA in the Supreme Court could have an unexpected - and we would argue undesirable – impact on the federalism concerns that we think should decide this case. This is because any interpretation of the Colorado Statute for purposes of the TIA made by the Court might be erroneously construed as carrying over to interpreting the Statute for purposes of the dormant Commerce Clause.

We think it likely and reasonable for the courts below to look to the Supreme Court’s decision on the TIA for guidance as to what test to apply under the dormant Commerce Clause. However, amici fear that a decision that held that Colorado’s reporting requirement is integral to Colorado’s “tax collection” for purposes of the TIA will exert a gravitational pull on the lower courts, encouraging them to apply the physical presence test from Quill Corp. v. North Dakota, 504 U.S. 298 (1992) to the Colorado Statute. The Quill test is an especially strict test under the dormant Commerce Clause, and one arguably meant only for “taxes.” Thus, a victory for sensible state tax administration and federalism in this Court could be transmuted into a defeat for those principles below. Amici believe that NFIB v. Sebelius, 132 S. Ct. 2566 (2012), teaches that an answer on the TIA does not compel an answer concerning the dormant Commerce Clause. We call this issue to the Court’s attention so that the Court is aware of how a decision on the TIA issue might be used – or misused – when the case reaches the merits, either in the state or federal court system.

This case, Direct Marketing Association v. Brohl, was recently remanded by the U.S. Supreme Court to the Tenth Circuit Court of Appeals. The Tenth Circuit then requested a full supplemental briefing; amici law professors submitted this brief.

Like all states with a sales tax, Colorado faced – and faces – a voluntary compliance problem with the collection of its use tax. The use tax is a complement to the sales tax; in-state vendors collect and remit the sales tax, while in-state consumers are responsible for remitting the use tax on purchases made from out-of-state vendors that do not collect the sales tax. To this compliance challenge, Colorado turned to a third-party reporting solution. In broad strokes, the Colorado Statute imposes a modest requirement on one party to a taxable transaction – specifically on relatively large retailers who do not collect the use tax - to report information on their Colorado sales both to the consumer/taxpayer and to the taxing authorities.

Amici make three specific arguments. First, amici demonstrate that third-party reporting of tax information is a ubiquitous and longstanding feature of modern tax systems. When tax authorities rely on taxpayers to self-report their taxable activities, compliance rates for the collection of any tax is low. Therefore, from the broader perspective of tax collection theory and history, including the history of very similar transaction-based taxes that attempt to tax consumption, the Colorado Statute is an unexceptional response to an otherwise intractable problem.

Second, amici argue that the Supreme Court’s decision in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), does not apply to the statute at issue in this case. Quill imposed a bright-line physical presence test as a precondition for a state to impose a use tax collection obligation on a retailer. Because of its own self-limiting language and logic, not to mention greatly changed circumstances, the rule of Quill should not be extended into a new area.

Third, amici argue that, because sales and use taxes constitute a unified system, there is no discrimination simply because differently situated retailers are required to aid in the collection of what is essentially a single tax in different ways.

Este trabalho tem por objetivo discutir a relação entre o nascimento do Mundo Contemporâneo, na interpretação de Geoffrey Barraclough, o surgimento do mercado mundial sob o capitalismo industrial, e as relações interestatais entre 1870-1914. Como hipótese, sugere-se que as visões apologéticas a respeito das virtudes da integração econômica global devem ser relativizadas diante da indissociabilidade histórica entre o mercado mundial e as demais “influências formativas” do Mundo Contemporâneo, todas tendentes ao acirramento do conflito interestatal. Desse modo, conclui-se que o mercado mundial não só se desenvolveu a partir de um “mundo dividido”, como foi – e segue sendo – vetor de aprofundamento dessa divisão. A análise se fundamenta na compreensão  dialógica das “influências formativas” tal como desenvolvida por Barraclough, e emprega dados compilados a partir das bases da NBER e de trabalhos estatísticos da OCDE.

This paper aims at discussing the relationship among the birth of the Contemporary World, according to Geoffrey Barraclough, the emergence of global markets under the industrial capitalism, and interstate relations between 1870 and 1914. As an hypothesis, it is suggested that apologetic visions about the virtues of global economic integration must be relativized due to the historical inseparability between the world market and other "formative influences" of the Contemporary World, all of which tend towards the intensification of interstate conflict. Conclusions point out to the fact that world market not only developed itself from a "divided world", but keeps on being a deepening vector of this division. The analysis is based on dialogic understanding of the "formative influences" as developed by Barraclough, and uses data compiled from NBER databases and OECD statistical works.

For more than 20 years, mail order sellers have been exempt from collecting state and local taxes on items delivered to customers out-of-state. By some calculatins, the annual lost tax revenue for the states on these sales exceeds $2 billion (5). The traditional legal anaiysis that has shielded these interstate sales from taxation has been modified by the Supreme Court and may no longer apply today. The direct marketing industry must adopt realistic policies regarding federal legislation or incur costly legal battles with state tax collectors that may lead to undesirable outcomes.

The Internet allows for a new business model and thus, has called into question how tax rules designed for a different model apply. Legislators, taxing agencies, businesses and tax practitioners continue discussions that began in 1996 on whether the existing tax rules and systems can apply to the new model or whether modifications or additions are needed. An added difficulty is that the new model is not firm, but continues to change, and will continue to do so as technological enhancements to Internet operations are created. Some of the interesting parts of the new business models include the fact that the Internet allows businesses to reach many customers from very few physical locations and that some products that previously were only deliverable in tangible form might now be deliverable in intangible form. Also, many businesses provide customer support via the Internet. Some businesses have also created Intranets to allow for improved internal communications and data sharing. The Internet has led to some decisions that fundamentally alter the operation of a business, such as Egghead's decision to eliminate its bricks and mortar stores and just sell software via the Internet. The ability to reach large markets from a single location can lead businesses, particularly new ones, to consider tax rules in their location decisions. For example, it has been reported that one of the reasons for Amazon.com not locating in California was that there are too many customers there and they would have to pay sales tax when buying books from an in-state company. 1 In a price-sensitive industry, whether a business is required to collect sales tax from customers is an important decision in structuring the business operations. Some of the key traits of e-commerce are highlighted in Appendix A along with a list of tax and fiscal considerations the traits present for businesses and governments. This chart also helps to illustrate the types of tax issues that arise in applying an industrial-age tax system to information-age transactions. Examples of e-commerce transactions and the tax issues they raise are presented in Appendix B.

Current statutes taxing inter-state e-commerce are facially unconstitutional because they violate the Commerce Clause by creating serious burdens on interstate commerce through
requiring foreign corporations to collect sales taxes on e-commerce regardless of whether they have a substantial nexus within the taxing states and violate Federal Legislation.  State and Federal courts across the country have come to different conclusions regarding this topic.  Congress has not yet resolved this public policy issue in part because technology has been
moving faster than legislation has been enacted.  As a result of the recent economic downturn and states’ fiscal duress, this matter's significance is increasing as more states enact legislation that tax inter-state e-commerce.  An equitable remedy is warranted for all unconstitutional duties that harm taxpayers and litigation including class action suits by consumers and
merchants may be used as a strategy to resolve and obtain redress in the future.  Should states be required to refund duties paid by businesses or taxpayers, these governments must adhere to the doctrines of prospective retroactivity.  In the event that states are deemed liable to refund these unconstitutional state taxes, the liabilities will further exacerbate some states’
fiscal condition