Tennessee Chancery Court Enjoins Enforcement of New Sales Tax Collection Rule

In response to a petition filed by George Isaacson and Matthew Schaefer on behalf of the American Catalog Mailers Association and NetChoice, the Tennessee Chancery Court has suspended enforcement of a Tennessee Department of Revenue rule that would have required out–of–state retailers without a physical presence in Tennessee to collect and remit Tennessee sales tax. As reported by BNA Bloomberg, the court enjoined enforcement of the rule while it considers whether it violates the Commerce Clause of the U.S. Constitution under Quill v. North Dakota. In the BNA Bloomberg article, Isaacson is quoted as saying, “I am especially pleased that the Order issued by the Tennessee Chancery Court will protect businesses throughout the country from being forced to contend with the many complex and confusing features of Tennessee tax law.” Isaacson went on to urge Tennessee and other states to “work cooperatively with catalog companies and electronic merchants to reform America’s sales tax system, which currently consists of more than 10,000 different jurisdictions, to make sales tax administration simpler, more uniform, and business friendly. Real tax reform will benefit consumers, state governments, and the health of our national economy.”