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SALT TALK:  Fantasy Football for the Supreme Court?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 24, 2016 11:00:00 AM
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One could argue that the United States Supreme Court (“SCOTUS”) never showed enthusiasm towards addressing state tax issues, and with the current roster being one Justice short, the situation has not changed. Accordingly, to move things along and remain completely bipartisan in the process, I propose that every federal Circuit Court justice will be required to participate in a fantasy football pool. Each week’s winner will get to be SALT Justice of the Week (“SJW”), a high honor indeed!  

The SJW will be required to review at least one state tax related petition for certiorari during his or her one week tenure and persuade the remaining Justices to grant the petition. Hopefully, the SJW will choose Direct Marketing Association v. Brohl

As discussed in my February 29, 2016 blog, “No One Likes a Tattletale”, Colorado enacted and the U.S. Court of Appeals for the Tenth Circuit upheld that requiring merchants to tattle on their customers is constitutional.  Specifically, the law requires retailers not collecting Colorado sales tax to do three things if sales to Colorado customers exceed $100,000:  they must tell Colorado purchasers that they owe use tax; they must provide an annual summary to the customer; and they must annually report the purchaser information to the Colorado Department of Revenue.

A petition for certiorari was filed by the Direct Marketing Association on August 29, 2016.  Many experts doubt that the petition will be granted since the Court already addressed a jurisdictional issue in the case.  Since so few petitions are granted, the odds just seem remote.

Rule 10 of the Supreme Court of the United States clearly states that a “[r]eview on a writ of certiorari is not a matter of right, but of judicial discretion.”  In setting forth reasons the Court should consider in exercising its discretion, Paragraph (c) states “a state court or a United States court of appeals has decided an important question of federal law that has not been, but should be, settled by this Court . . .”  Regardless of what you believe the result should be, a state statute imposing regulatory requirements on out-of-state companies certainly is one of those questions needing to be settled.

For questions regarding state and local tax issues, contact me at WBerkowitz@berdonllp.com  or your Berdon advisor.

Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.

Topics: SALT TALK

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