Latest Voice in ‘Kill Quill’Chorus? An Online Florist

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By Chris Marr

Nov. 1 — States advocating the death of the U.S. Supreme Court’s physical presence rule for sales taxes got a new ally they might not have expected—an online vendor fighting to overturn Florida’s florist tax regime ( Am. Bus. USA Corp. v. Fla. Dep't of Revenue , U.S., No. 16-567, cert. petition filed 10/24/16 ).

American Business USA Corp., an internet vendor of flowers and gifts baskets based in Florida, is asking the Supreme Court to review its tax dispute, in part because it says the case is a good chance to reconsider the court’s 1992 Quill Corp. v. North Dakota ruling. That decision reaffirmed the rule that states can impose sales and use tax duties only on companies with an in-state physical presence.

Quill has become the target of state legislatures and revenue agencies around the country that are looking to capture sales taxes on e-commerce transactions in which the seller isn’t physically present but the customers and the delivery of goods are. Alabama and South Dakota are trying to advance a case to the Supreme Court.

The American Business case presents the inverse situation, with the seller physically present but the customer and goods out of state, according to the company’s Oct. 24 petition for Supreme Court review. The case offers the high court a chance either to overturn Quill—to prevent states from imposing sales tax simply because of a seller’s physical presence—or to reaffirm that states can’t tax transfers of property that happen entirely outside their borders, the company’s attorneys argued in the petition.

“The present case offers the Court an excellent opportunity to define the contours of state sales tax collection in the internet age,” the attorneys, led by Michael D. Sloan of Carlton Fields Jorden Burt P.A., wrote.

Sloan declined to comment to Bloomberg BNA, and the Florida Department of Revenue didn’t immediately respond to a request for comment.

Back Door Into ‘Quill.’

The reasoning by the Florida Supreme Court’s May ruling in favor of the DOR could open broad possibilities, such as the state of Washington imposing sales tax on every sale made by Amazon, simply because the company is based in that state, said James H. Sutton Jr. of Moffa, Sutton, & Donnini PA, a Florida tax attorney not directly involved in the case.

The plaintiff’s attorneys did a good job of making this point and “trying to talk the Supreme Court into taking this case as a back door into redefining Quill,” Sutton told Bloomberg BNA on Nov. 1. Still, the company might have had a stronger case by focusing its argument more on the risk of double taxation under Florida’s florist tax regime, he added.

Sutton serves as state and local tax chairman for the American Academy of Attorney-CPAs, which filed an amicus brief in this case at the Florida Supreme Court. He would recommend the organization also file an amicus brief at the U.S. Supreme Court, if the court grants review, he said.

Pandora’s Box?

The court has “been inviting people to bring them cases on this issue,” Sutton said, in reference to the Quill standard.

Nevertheless, “they’ve been turning down every sales tax case for the last several years,” he said.

The florist case might be different, as Florida’s policy “opens Pandora’s box” to tax any transaction with a remote connection to the state, he added.

“I think it’s got a higher chance of being granted cert, but it’s still fairly low,” Sutton said.

Despite the company’s argument of broad e-commerce implications, the court might decide ultimately that the case is too narrowly focused on one state’s florist tax law, he said.

Florida Court Upheld Tax

The company seeks U.S. Supreme Court review after losing its case in a May ruling by the Florida Supreme Court. The Florida court found the Florida Department of Revenue’s sales tax assessment against the company didn’t violate the constitution’s dormant commerce clause, as understood via Quill.

American Business processes online orders for flowers and gift baskets to be delivered in the U.S. and Latin America. The company keeps no inventory but instead forwards the orders to local florists.

It collects sales tax on orders to be delivered in Florida, but the Florida DOR assessed the company in 2012 for uncollected sales tax on orders to be delivered outside the state. The company won its fight against the assessment at a state appellate court, before the Florida Supreme Court reversed that ruling in May.

To contact the reporter on this story: Chris Marr in Atlanta at

To contact the editor responsible for this story: Ryan C. Tuck at

For More Information

Text of the petition is at

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