State Tax Titan Leaves Online Sales Tax Legacy at National Group

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Ryan Prete

“I’d take Max Behlke with me into a legislative battle over anyone.”

So says Utah Sen. Curtis Bramble (R), former president of the National Conference of State Legislatures (NCSL), where Behlke has worked since 2010.

But the legislative battles are over for now for the man who helped topple a long-divisive U.S. Supreme Court rule in the “tax case of the millennium"—at least at the NCSL.

Aug. 15 was Behlke’s last day with the NCSL, a non-government organization seeking to improve state legislatures and influence policy at the federal level.

Behlke, director of budget and tax, took on many tasks in his eight years with the organization. He considers his work in advancing South Dakota Sen. Deb Peters’ (R) online sales tax statute (S.B. 106) as one of his greatest achievements.

That law would eventually become the focus of the U.S. Supreme Court’s June 21 ruling in South Dakota v. Wayfair. In the ruling, the high court tossed out Quill Corp. v. North Dakota, its disputed 1992 physical presence threshold for when states could tax remote sales, and suggested strongly that South Dakota’s economic nexus threshold of annual in-state sales exceeding $100,000 or 200 separate in-state transactions would pass constitutional muster. More than two dozen states have established economic nexus laws, many of them identical to South Dakota’s.

“To hear your name, and your colleagues’ names, cited before the Supreme Court, and for the justices to validate all the hours and late nights of hard work, it’s really hard to put into words what that meant,” Behlke told Bloomberg Tax.

During an NCSL conference in March, Behlke became the first person to coin the term “tax case of the millennium” in reference to the Wayfair case.

“South Dakota was actually my assigned state at the NCSL, and in 2015, Senator Peters and I discussed challenging Quill and the physical presence rule. We then met and discussed the idea with South Dakota’s attorney general and other state officials before the senator introduced the bill in January 2016,” Behlke said. “After we met with a group of South Dakota lawmakers to discuss the statute, the most common question I got was ‘why can’t we vote on this today?’”

Challenging Lawmakers

Peters told Bloomberg Tax that Behlke brought an unparalleled intensity to the NCSL.

“Max brought a unique sense of passion,” Peters said. “He helped challenge legislators to think outside the box, and he wasn’t afraid to put you outside of your comfort zone, which bettered you.”

Peters said as a young 20-something fresh out of college and new to the NCSL, Behlke would read anything tax-related on which he could get his hands.

“He took on everything from sports betting to property taxes. He really made us all learn,” she said.

Bramble echoed Peters’ accolades, referring to Behlke as a necessary mediator in times of high tension.

“Max took all the inertia behind the Wayfair movement and focused on making sure the NCSL’s agenda was being advanced,” he said. “Once, Behlke was able to arrange a meeting between the NCSL and a group of catalog retailer individuals who were often hostile towards the NCSL’s stance on online sales tax. But Behlke made it happen. We have a useful, bilateral discussion which wouldn’t have happened without him.”

Successes on Hill

Behlke moved up the ranks at the NCSL, serving in several positions before finally as the director of budget and tax. Behlke was also the primary staffer on the NCSL’s State and Local Tax Task Force.

Behlke said another of his favorite memories with the NCSL came in 2012, when he helped to take the NCSL’s membership to Capitol Hill, meeting with 74 U.S. senators in one day. In 2014, Behlke helped to orchestrate an NCSL meeting with half of the members of the U.S. House of Representatives.

“In the combined four hours from the meetings in 2012 and 2014, we met with more members of Congress than any other organization I can think of,” he said.

Moving Forward

Behlke said Jake Lestock, a policy specialist at the NCSL, will replace him as the primary staffer on the SALT Task Force. He said that Lestock’s three main priorities in the upcoming year will be:

  • making sure states continually look to the NCSL for guidance on moving forward and implementation post-Wayfair;
  • sports betting, as more states look to legalize the activity; and
  • the digital economy, as more states look to expand their sales tax base. Behlke said 2019 will be the biggest year for state tax changes.

So what’s next for Behlke—who said he’s already flown more than 50,000 miles this year? He said he’s taking more than a month to travel and visit family and friends. But don’t expect him to be missing for long.

“I can’t see myself leaving D.C. I live and breathe the political policy culture,” he said. “But for the next couple weeks, I’m just going to focus on my golf game.”

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