The Supreme Court set the stage Monday for a ruling with huge economic repercussions by agreeing to reconsider its 24-year-old decision that effectively prevented states from collecting taxes on most mail-order sales.
The court, beginning its 1991-92 term with the usual "First Monday in October" flurry of activity, issued orders in more than 1,300 cases. It also began hearing arguments in cases already granted review.Only eight justices were on the bench Monday. Clarence Thomas, nominated by President Bush to replace retired Justice Thurgood Marshall, has not yet been confirmed by the Senate (see story on A2).
At issue in the catalog sales case is a North Dakota dispute over whether a state may force out-of-state catalog companies to collect the sales and use taxes its residents owe on mail-order purchases. Billions of dollars are at stake for state treasuries and millions of consumers.
The high court in 1967 banned states from imposing tax-collection obligations on businesses that have no "physical presence" within their borders. To impose such obligations would violatethose companies' due-process rights and interfere unduly with interstate commerce, the court said then.
But the North Dakota Supreme Court ruled last May that the 1967 ruling is an "obsolescent precedent."
In June, the high court, relying on the 1967 precedent, refused to let Connecticut force catalog companies to collect taxes on mail-order purchases. The justices agreed to reconcile the North Dakota and Connecticut cases.
Mail-order sales reportedly are over $200 billion a year. One reason for their rapid growth is the attraction of tax-free purchases.
The justices were told that the District of Columbia and the 46 states that have sales and use taxes lost over $2 billion in revenues in 1988 because they could not collect taxes from mail-order companies. Although states legally may tax consumers for mail-order purchases, they have no means of enforcing such laws.
In other action, the court:- Agreed to consider making it easier for law enforcement officials to retry some criminal defendants who were acquitted on related charges.
- Agreed to decide whether California's Proposition 13, product of a late 1970s tax revolt, unfairly taxes owners of recently purchased property.
- Agreed to decide whether people who receive back pay after winning job-bias lawsuits have to pay taxes on that money. The court said it will review a ruling in a Tennessee case that back pay awarded to make up for past discrimination is tax exempt.
- Agreed to consider giving the government more power to regulate some pistols that can be converted into short-barreled rifles.
- Refused to resolve a dispute over the patenting of genetically engineered new life forms. Scientists say the case could affect the treatment of AIDS and other diseases.
- Refused to lift an injunction barring various forms of protest demonstrations by Operation Rescue members at abortion clinics in Atlanta.
- Said it will use the case of David E. Riggins, a Nevada death row inmate, to decide whether defendants may be forced to take drugs while they are on trial.