Taxation and State Taxation -- active



Quad Graphics, Inc. v. North Carolina Department of Revenue   (U.S. Supreme Court)

Challenging North Carolina’s Tax on Out-of-State Sales

On April 17, 2023, the NAM filed an amicus brief urging the U.S. Supreme Court to review and reverse a North Carolina Supreme Court decision disregarding precedent that precludes a state from taxing the sale of goods that occurs outside its borders. Quad Graphics is a Wisconsin-based commercial printer that prints books, magazines, catalogs, and direct-mail items for customers throughout the United States, including in North Carolina. The North Carolina Department of Revenue imposed a sales tax on Quad for sales to North Carolina residents even though those sales were consummated in Wisconsin by passing title to the merchandise (and risk of loss) when the merchandise arrived at a common carrier’s shipping dock outside of North Carolina for shipping. The North Carolina Supreme Court upheld the tax, concluding that subsequent U.S. Supreme Court precedent implicitly overruled McLeod v. J.E. Dilworth Co., 322 U.S. 327 (1944), which precludes taxing out-of-state sales.

We argued in our amicus brief that review is necessary for manufacturers to have clear rules about where and when taxes will be imposed. Further, the U.S. Supreme Court should grant the petition because the Commerce Clause precludes a state regulating conduct outside its borders. All manufacturers have an interest in limiting a state’s ability to regulate conduct occurring outside its borders as well as reducing the untenable risk of double taxation.

Unfortunately, on June 20, 2023, the Court denied the petition for certiorari.


Related Documents:
NAM brief  (April 17, 2023)