South Dakota Continues to Blaze Trail in Kill-Quill Challenge, While Tennessee Case Sputters

Remember when Governor Haslam was claiming that Tennessee would be the best state to lead the charge on challenging the U.S. Supreme Court's holding in Quill to apply sales tax to remote online retailers making sales into Tennessee? Well if that is the case, Tennessee needs to put the pedal to the metal because South Dakota is out to a sizeable lead. 

South Dakota's Supreme Court issued its decision on September 14, only two weeks after oral argument in the South Dakota v. Wayfair case, upholding the lower court's decision to strike down the statutory impositionof South Dakota sales tax on remote sellers selling to customers in that state.

Not a surprising result considering the binding nature of the Quill decision, but the speed ... oh the speed with which this case is proceeding, that appears to be the real story for now. And based on reports after the issuance of the decision, the South Dakota state attorneys plan to file a cert application with the U.S. Supreme Court by mid-October. For more coverage on the South Dakota decision, visit BNA's website

Meanwhile, the Tennessee case remains mired in a discovery dispute related to the identity of impacted taxpayers with a recent discovery decision from the Chancery Court requiring the trade associations to identify their members who are effected by the Tennessee regulation. Since that decision on August 21, 2017, the South Dakota case has been argued and decided by the Tennessee Supreme Court. Not a good look for the efficiency of the judicial process in the Volunteer state...

If Tennessee is going to have a seat at the table before the U.S. Supreme Court, the state's attorneys might want to forego all the discovery posturing and start getting the case postured for a hearing. At best, a motion for summary judgment could be set in Tennessee for late October/early-November, and the appeal timeline in Tennessee will be much longer than what we are seeing out of South Dakota, which will require an appeal to the Tennessee Court of Appeals and a discretionary appeal process to the Tennessee Supreme Court.

We'll see how it plays out, but it looks like for now that Tennessee is going to be left at the alter. And all the Legislature's and the Governor's posturing about leading the way on killing Quill will just be a bunch of hot air.