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Friday, June 3, 2011

U.S. Supreme Court Sidesteps State Tax Cases

The U.S. Supreme Court begins its 2009 term on Monday, Oct. 5, but state tax junkies have little to cheer them. This year’s docket is even more bereft of state tax issues than last year.

No state tax case has been granted cert so far. Two cases that state tax specialists may watch with some interest are Bliski v. Doll, which deals with patenting business practices (and thus could have implications for tax planning patents) and Hemi Group LLC v. New York City, which deals with, of all things, a RICO action by the city against out-of-state vendors of cigarettes. The issue in that case is whether the city met the standing requirement for a civil RICO action to recover uncollected city tobacco taxes.

It’s still possible that the court may grant review to a case that actually addresses a pressing issue in the state tax field: Ford Motor Co. v. Delaware, dealing with apportionment of a gross receipts tax, is on the list for the Sept. 29 conference. Who knows? The court may surprise us all and grant cert, but so far, our annual Supreme Court roundup looks like it will be focused on the cases the court left in the dust.

Among those cases the court passed up: Capitol One Bank v. Massachusetts Comr. of Rev. and Geoffrey Inc. v. Massachusetts Comr. of Rev., both dealing with economic nexus. The court denied cert in both cases June 22 and thus left open the question of whether physical presence is necessary to subject an out-of-state corporation to Massachusetts income tax. The state says it is not—a position that conflicts with rulings of other states and with the U.S. Supreme Court’s own holding in Quill.

By Dolores W. Gregory

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