Author Question: Hypothetical: Acme Corp, an online retailer with its principal place of business in Nevada, decides ... (Read 69 times)

tfester · **on:** Aug 3, 2018

Hypothetical: Acme Corp, an online retailer with its principal place of business in Nevada, decides it wants to expand its online retail operations by offering customers in California to return and exchange products purchased online through XYZ Corp retail stores in California. To promote this new service, Acme has engaged in an advertising campaign in California. Acme Corp and XYZ Corp are both wholly-owned of the Acme Group. The California Franchise Tax Board now wants to collect state sales tax from Acme Corp for purchases from California residents. Discuss whether the California Franchise Tax Board violates the Commerce Clause of the United States Constitution in collecting state sales tax.

What will be an ideal response?

Question 2

The parties are not permitted to agree on a remedy for breach of a contract; the remedy is within the sole discretion of the court.

Indicate whether the statement is true or false

fraziera112 · **Reply #1 on:** Aug 3, 2018

Answer to Question 1

A court would apply the substantial nexus test under Quill v. North Dakota. Before a state may impose a tax on an out-of-state entity, a state must establish that the imposition of the tax is consistent with the Commerce Clause of the U.S. Constitution. The state must show that the tax is applied to an activity with a substantial nexus with the taxing state.

Answer to Question 2

FALSE