Miller Bros. v. Maryland

Background

A Delaware retail furniture store sold only from its single Wilmington store and did not take mail or telephone orders. Some Maryland residents traveled to the store and bought furniture; some carried purchases away, some had them shipped by common carrier to Maryland, and some had them delivered by the store’s own truck. Maryland’s law imposed a use tax on goods brought into Maryland for use and required vendors to collect and remit that tax. Maryland seized the store’s truck and its courts held the store liable for the use tax on all such sales to Maryland residents.

Reasoning

The Court asked whether the store’s limited advertising and occasional deliveries created the kind of connection with Maryland that lets a State force an out-of-state seller to collect its use tax. Looking at the facts the parties agreed on, the Court said the store’s general advertising, occasional mailed circulars, deliveries by common carrier, and limited truck deliveries did not amount to the continuous local solicitation or presence that earlier cases had treated as justification for forcing collection. Because the vendor’s liability was based on purchasers’ later use in Maryland rather than on sales activity inside Maryland, the Court found no sufficient link to allow Maryland to impose collector responsibility on the Delaware store.

Real world impact

The decision prevents Maryland from making this particular out-of-state store collect its residents’ use tax under these facts. It protects merchants who sell only at an out-of-state store from being treated like local businesses when contacts with the taxing State are limited. The ruling leaves open that more active, in-state solicitation or regular local deliveries might justify collection duties in other cases.

Dissents or concurrances

A dissenting opinion argued the store’s regular advertising reaching Maryland and repeated deliveries made collection a minimal administrative burden and thus permissible.