Online Florist Sales Tax Fight Won’t Get Supreme Court Review

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By Chris Marr

An online florist’s sales tax challenge won’t ripen at the U.S. Supreme Court, where the company’s attorneys urged justices to reshape sales tax law for the e-commerce age ( Am. Bus. USA Corp. v. Fla. Dep’t of Revenue , U.S., No. 16-567, cert. denied 2/21/17 ).

American Business USA Corp., which has its headquarters in Florida, argued that the state Department of Revenue couldn’t require sales tax collections on flower orders forwarded to out-of-state florists who delivered flowers to out-of-state recipients. The Florida Supreme Court disagreed in a May 2016 decision.

The company’s attorneys urged the U.S. Supreme Court to review the case and to revisit its Quill Corp. v. North Dakota physical presence standard that determines when states can impose sales tax obligations on businesses—a standard that’s under nationwide scrutiny as states seek to capture sales tax from the growing electronic commerce market. Although the company had a physical presence in Florida, it argued the disputed transactions had no substantial connection there.

The Supreme Court’s Feb. 21 denial in the case is the second time that it recently “declined to shoehorn a reconsideration of Quill,” said Joe Crosby, a principal at MultiState Associates in Washington.

A number of states are trying to position cases for the court to revisit and perhaps overturn its 1992 decision in Quill, which reaffirmed that states can force companies to collect their sales tax only if the companies have an in-state physical presence. In the American Business case, it was the taxpayer, not the state, inviting a Quill review.

‘Ill-Suited Vehicle.’

“This case did not squarely present the Quill issue of state taxation of remote sellers, and thus I don’t think it speaks to whether the Court will take a case to reconsider that decision,” Crosby told Bloomberg BNA, saying it focused on the unique model of taxing interstate flower sales.

The court must be aware “that it will have ample opportunity to take a case that is actually on point, such as the current litigation in South Dakota, rather than settling on an ill-suited vehicle to review Quill,” Crosby said.

In addition to litigation over South Dakota’s 2016 tax expansion over e-retailers, challenges are weaving through the Alabama and Tennessee systems with the goal of reaching the high court.

‘Whipsaw’ Businesses?

In the meantime, there’s concern that the Florida revenue department and other states could take the Florida Supreme Court decision to its extreme, James Sutton, a tax attorney at Moffa, Sutton & Donnini PA in Tampa, Fla., told Bloomberg BNA.

He said the Florida DOR has told him it only intends to apply the ruling to flower sales, “but now you’ve got a court case that says they’ve got the ability to do it,” he said. If the department were to begin applying this authority through tax audits on other types of companies, “it’s going to whipsaw the living hell out of businesses.”

State Points to Transaction Origin

The Florida revenue department argued in its Jan. 12 brief to the U.S. Supreme Court that the American Business case raised no significant controversy, as most states follow a similar regime for taxing multistate florist orders.

An origin-based sales tax policy is the most practical approach, the state argued, and it lines up with the Quill precedent.

The argument runs counter to the position advanced by numerous other states that are beginning to require out-of-state sellers to collect and pay sales tax based on the destination of the products sold. Alabama and South Dakota are front-runners in the movement designed to fell Quill. About half the U.S. states have pending bills this session to expand their authority over online sales.

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

The state’s Jan. 12 brief is at

The taxpayer's Oct. 24 petition for review is at

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