Justice Kennedy

As of the end of July, Justice Anthony Kennedy is retired. For states and local governments he will be forever remembered as the Justice who championed allowing online sales tax collection.

In March 2015, Justice Kennedy wrote that the “legal system should find an appropriate case for this Court to reexamine Quill,” which held that businesses without a physical presence in the state did not have to collect sales tax. In his last majority opinion on the bench, South Dakota v. Wayfair, the Supreme Court overturned Quill.

Justice Kennedy was a pivotal Justice for most of his thirty year tenure on the Supreme Court. He often provided the Court’s crucial fifth vote on hot-button national issues. In Planned Parenthood v. Casey, Justice Kennedy blazed a middle path, writing part of the opinion that moved the Court slightly to the right while declining to overrule Roe v. Wade. In LGBTQ cases Justice Kennedy played a much more progressive role, writing for the majority to strike down a law allowing for same-sex discrimination and eventually striking down gay marriage bans in Obergefell v. Hodges.

The Tenth Circuit held that a Colorado law requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue is constitutional.

In Quill Corp. v. North Dakota, decided in 1992, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect use tax. To improve tax collection, in 2010 the Colorado legislature began requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue. The Direct Marketing Association sued Colorado in federal court claiming the law was unconstitutional under Quill. 

So the million dollar question (other than who will fill Justice Scalia’s seat) is what will happen to undecided Supreme Court cases heard or to be heard this term.

The short answer is it depends and in all instances isn’t entirely clear.

If a case isn’t 4-4 it will be decided as usual with only eight Justices.

If a case is going to be decided 4-4 the Court has two choices:  wait for the ninth Justice to join the Court and rehear the case or issue a non-precedential 4-4 decision that affirms the lower court decision.

If you know anything about the State and Local Legal Center (SLLC) you know that it files amicus briefs in U.S. Supreme Court cases affecting state and local government. The SLLC made an exception and filed an amicus brief in a federal circuit court of appeals case because of the importance of the issue to SLLC members.

In Direct Marketing Association v. Brohl the Tenth Circuit will decide whether Colorado’s law requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue is unconstitutional. At least three other states have similar notice and reporting requirements (Oklahoma, South Dakota, and Vermont).