Wayfair Undermines Nicastro: The Constitutional Connection Between State Tax Authority and Personal Jurisdiction

128 YALE L.J.F. __ (2019 Forthcoming)

18 Pages Posted: 11 Dec 2018

See all articles by Allan Erbsen

Allan Erbsen

University of Minnesota - Twin Cities - School of Law

Date Written: November 28, 2018

Abstract

This Essay exposes connections between two controversial cases that unsettled two ostensibly distinct areas of constitutional law. The Supreme Court’s 2018 decision in South Dakota v. Wayfair held that the Commerce Clause permits enforcement of sales taxes against online retailers with no physical presence in the taxing state. In contrast, the Court’s 2011 decision in J. McIntyre Machinery v. Nicastro held that the Due Process Clause prevents states from exercising personal jurisdiction over nonresident manufacturers who did not target the forum. Wayfair and Nicastro address conceptually similar questions about extraterritorial enforcement of state law yet rely on inconsistent assumptions. A close reading of Wayfair illuminates normative and practical insights that warrant narrowing or overruling Nicastro. More generally, this Essay highlights how situating doctrinal problems in the broader context of horizontal federalism can improve constitutional analysis.

Keywords: Personal Jurisdiction, Tax Jurisdiction, State and Local Tax, Horizontal Federalism, Due Process, Commerce Clause, Extraterritorial Regulation, E-Commerce, Sales Taxes, Use Taxes, Wayfair, Nicastro, Quill, Constitutional Law, Supreme Court

JEL Classification: H71, K34, K41

Suggested Citation

Erbsen, Allan, Wayfair Undermines Nicastro: The Constitutional Connection Between State Tax Authority and Personal Jurisdiction (November 28, 2018). 128 YALE L.J.F. __ (2019 Forthcoming). Available at SSRN: https://ssrn.com/abstract=3291858

Allan Erbsen (Contact Author)

University of Minnesota - Twin Cities - School of Law ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

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