Connecticut Sales and Use Tax: U.S. Supreme Court Asked Whether Teachers Created Nexus for Mail-Order Bookseller

The Connecticut Commissioner of Revenue Services had asked the U.S. Supreme Court whether an out-of-state mail order company that sells books to teachers and students was liable for sales and use tax deficiency assessments because the teachers acted as the corporation’s representatives for purposes of establishing nexus to justify imposition of the taxes under the Commerce Clause. The Connecticut Supreme Court held that the teachers were in-state representatives of the bookseller corporation in that they served as the sole conduit through which the corporation advertises, markets, sells, and delivers its products to Connecticut schoolchildren. Although individual teachers may decide not to participate in the program, those who do participate distribute the corporation’s catalogs, flyers, order forms, and other materials to children in their classrooms. The company is able to sell its products in Connecticut only through the teachers who participate in its program.

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