DETERMINING THE BOUNDARIES OF A POST-BELLAS HESS WORLD

The treatment of out-of-state mail order firms has been a constant problem for governments imposing a sales and use tax. Because of a series of US Supreme Court cases, culminating with the National Bellas Hess decision in 1967, out-of-state vendors maintain that they cannot be required to collect either the sales or use tax of the consumer's state (the market state) if the only contacts with that state consist of distributing catalogs and other advertising materials through the mail. Attempts to overrule Bellas Hess judicially, legislatively, or administratively continue, undoubtedly fueled by the sheer magnitude of the revenue at stake. If Bellas Hess were legislatively or judicially overruled so that the market state's use tax on interstate sales would now be collected, vendor state taxes on such transactions might become widespread. If Congress responds to Bellas Hess, the taxation of interstate sales should be part of its agenda.