 

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

          Syllabus

QUILL CORP. v. NORTH DAKOTA, BY AND
THROUGH ITS TAX COMMISSIONER, HEITKAMP
certiorari to the supreme court of north dakota
No. 91194.   Argued January 22, 1992"Decided May 26, 1992

Respondent North Dakota filed an action in state court to require
petitioner Quill Corporation"an out-of-state mail-order house with
neither outlets nor sales representatives in the State"to collect and
pay a use tax on goods purchased for use in the State.  The trial
court ruled in Quill's favor.  It found the case indistinguishable from
National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S.
753, which, in holding that a similar Illinois statute violated the
Fourteenth Amendment's Due Process Clause and created an uncon-
stitutional burden on interstate commerce, concluded that a ``seller
whose only connection with customers in the State is by common
carrier or the . . . mail'' lacked the requisite minimum contacts with
the State.  Id., at 758.  The State Supreme Court reversed, conclud-
ing, inter alia, that, pursuant to Complete Auto Transit, Inc. v.
Brady, 430 U.S. 274, and its progeny, the Commerce Clause no
longer mandated the sort of physical-presence nexus suggested in
Bellas Hess; and that, with respect to the Due Process Clause, cases
following Bellas Hess had not construed minimum contacts to require
physical presence within a State as a prerequisite to the legitimate
exercise of state power.
Held:
1.The Due Process Clause does not bar enforcement of the State's
use tax against Quill.  This Court's due process jurisprudence has
evolved substantially since Bellas Hess, abandoning formalistic tests
focused on a defendant's presence within a State in favor of a more
flexible inquiry into whether a defendant's contacts with the forum
made it reasonable, in the context of the federal system of govern-
ment, to require it to defend the suit in that State.  See, Shaffer v.
Heitner, 433 U.S. 186, 212.  Thus, to the extent that this Court's
decisions have indicated that the clause requires a physical presence
in a State, they are overruled.  In this case, Quill has purposefully
directed its activities at North Dakota residents, the magnitude of
those contacts are more than sufficient for due process purposes, and
the tax is related to the benefits Quill receives from access to the
State.  Pp.58.
2.The State's enforcement of the use tax against Quill places an
unconstitutional burden on interstate commerce.  Pp.919.
(a)Bellas Hess was not rendered obsolete by this Court's subse-
quent decision in Complete Auto, supra, which set forth the four-part
test that continues to govern the validity of state taxes under the
Commerce Clause.  Although Complete Auto renounced an analytical
approach that looked to a statute's formal language rather than its
practical effect in determining a state tax statute's validity, the
Bellas Hess decision did not rely on such formalism.  Nor is Bellas
Hess inconsistent with Complete Auto.  It concerns the first part of
the Complete Auto test and stands for the proposition that a vendor
whose only contacts with the taxing State are by mail or common
carrier lacks the ``substantial nexus'' required by the Commerce
Clause.  Pp.912.
(b)Contrary to the State's argument, a mail-order house may
have the ``minimum contacts'' with a taxing State as required by the
Due Process Clause, and yet lack the ``substantial nexus'' with the
State required by the Commerce Clause.  These requirements are not
identical and are animated by different constitutional concerns and
policies.  Due process concerns the fundamental fairness of govern-
mental activity, and the touchstone of due process nexus analysis is
often identified as ``notice'' or ``fair warning.''  In contrast, the Com-
merce Clause and its nexus requirement are informed by structural
concerns about the effects of state regulation on the national econo-
my.  Pp.1213.
(c)The evolution of this Court's Commerce Clause jurisprudence
does not indicate repudiation of the Bellas Hess rule.  While cases
subsequent to Bellas Hess and concerning other types of taxes have
not adopted a bright-line, physical presence requirement similar to
that in Bellas Hess, see, e. g., Standard Pressed Steel Co. v. Depart-
ment of Revenue of Wash., 419 U.S. 560, their reasoning does not
compel rejection of the Bellas Hess rule regarding sales and use
taxes.  To the contrary, the continuing value of a bright-line rule in
this area and the doctrine and principles of stare decisis indicate that
the rule remains good law.  Pp.1418.
(d)The underlying issue here is one that Congress may be better
qualified to resolve and one that it has the ultimate power to resolve.
Pp.1819.
     470 N.W. 2d 203, reversed and remanded.

Stevens, J., delivered the opinion for a unanimous Court with
respect to Parts I, II, and III, and the opinion of the Court with respect
to Part IV, in which Rehnquist, C. J., and Blackmun, O'Connor, and
Souter, JJ., joined.  Scalia, J., filed an opinion concurring in part and
concurring in the judgment, in which Kennedy and Thomas, JJ.,
joined.  White, J., filed an opinion concurring in part and dissenting
in part.



 NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D.C. 20543, of any typographical or other formal errors, in order that
corrections may be made before the preliminary print goes to press.
             SUPREME COURT OF THE UNITED STATES
                       No. 91-194
 
         QUILL CORPORATION, PETITIONER v. NORTH
               DAKOTA by and through its TAX COMMIS-
                      SIONER, HEIDI HEITKAMP
           on writ of certiorari to the supreme court of
                           north dakota
                          [May 26, 1992]

       Justice Stevens delivered the opinion of the Court.
       This case, like National Bellas Hess, Inc. v. Department
of Revenue of Ill., 386 U. S. 753 (1967), involves a State's
attempt to require an out-of-state mail-order house that has
neither outlets nor sales representatives in the State to
collect and pay a use tax on goods purchased for use within
the State.  In Bellas Hess we held that a similar Illinois
statute violated the Due Process Clause of the Fourteenth
Amendment and created an unconstitutional burden on
interstate commerce.  In particular, we ruled that a ``seller
whose only connection with customers in the State is by
common carrier or the United States mail'' lacked the
requisite minimum contacts with the State.  Id., at 758.
       In this case the Supreme Court of North Dakota declined
to follow Bellas Hess because ``the tremendous social,
economic, commercial, and legal innovations'' of the past
quarter-century have rendered its holding ``obsole[te].''  470
N. W. 2d 203, 208 (1991).  Having granted certiorari, 502
U. S. ___, we must either reverse the State Supreme Court
or overrule Bellas Hess.  While we agree with much of the
State Court's reasoning, we take the former course.
                                 I
       Quill is a Delaware corporation with offices and ware-
houses in Illinois, California, and Georgia.  None of its
employees work or reside in North Dakota and its owner-
ship of tangible property in that State is either insignificant
or nonexistent.  Quill sells office equipment and supplies;
it solicits business through catalogs and flyers, advertise-
ments in national periodicals, and telephone calls.  Its
annual national sales exceed $200,000,000, of which almost
$1,000,000 are made to about 3,000 customers in North
Dakota.  It is the sixth largest vendor of office supplies in
the State.  It delivers all of its merchandise to its North
Dakota customers by mail or common carrier from out-of-
state locations.
       As a corollary to its sales tax, North Dakota imposes a
use tax upon property purchased for storage, use or
consumption within the State.  North Dakota requires every
``retailer maintaining a place of business in'' the State to
collect the tax from the consumer and remit it to the State.
N. D. Cent. Code 5740.207 (Supp. 1991).  In 1987 North
Dakota amended the statutory definition of the term
``retailer'' to include ``every person who engages in regular
or systematic solicitation of a consumer market in th[e]
state.''  5740.201(6).  State regulations in turn define
``regular or systematic solicitation'' to mean three or more
advertisements within a 12-month period.  N. D. Admin.
Code 8104.10103.1 (1988).  Thus, since 1987, mail-
order companies that engage in such solicitation have been
subject to the tax even if they maintain no property or
personnel in North Dakota.
       Quill has taken the position that North Dakota does not
have the power to compel it to collect a use tax from its
North Dakota customers.  Consequently, the State, through
its Tax Commissioner, filed this action to require Quill to
pay taxes (as well as interest and penalties) on all such
sales made after July 1, 1987.  The trial court ruled in
Quill's favor, finding the case indistinguishable from Bellas
Hess; specifically, it found that because the State had not
shown that it had spent tax revenues for the benefit of the
mail-order business, there was no ``nexus to allow the state
to define retailer in the manner it chose.''  App. to Pet. for
Cert. A41.
       The North Dakota Supreme Court reversed, concluding
that ``wholesale changes'' in both the economy and the law
made it inappropriate to follow Bellas Hess today.  470
N. W. 2d, at 213.  The principal economic change noted by
the court was the remarkable growth of the mail-order
business ``from a relatively inconsequential market niche''
in 1967 to a ``goliath'' with annual sales that reached ``the
staggering figure of $183.3 billion in 1989.''  Id., at 208,
209.  Moreover, the court observed, advances in computer
technology greatly eased the burden of compliance with a
```welter of complicated obligations''' imposed by state and
local taxing authorities.  Id., at 215 (quoting Bellas Hess,
386 U. S., at 759760).
       Equally important, in the court's view, were the changes
in the ``legal landscape.''  With respect to the Commerce
Clause, the court emphasized that Complete Auto Transit,
Inc. v. Brady, 430 U. S. 274 (1977), rejected the line of cases
holding that the direct taxation of interstate commerce was
impermissible and adopted instead a ``consistent and
rational method of inquiry [that focused on] the practical
effect of [the] challenged tax.''  Mobil Oil Corp. v. Commis-
sioner of Taxes of Vt., 445 U. S. 425, 443 (1980).  This and
subsequent rulings, the court maintained, indicated that
the Commerce Clause no longer mandated the sort of
physical-presence nexus suggested in Bellas Hess.
       Similarly, with respect to the Due Process Clause, the
North Dakota court observed that cases following Bellas
Hess had not construed ``minimum contacts'' to require
physical presence within a State as a prerequisite to the
legitimate exercise of state power.  The State Court then
concluded that ``the Due Process requirement of a `minimal
connection' to establish nexus is encompassed within the
Complete Auto test'' and that the relevant inquiry under the
latter test was whether ``the state has provided some
protection, opportunities, or benefit for which it can expect
a return.''  470 N. W. 2d, at 216.
       Turning to the case at hand, the State Court emphasized
that North Dakota had created ``an economic climate that
fosters demand for'' Quill's products, maintained a legal
infrastructure that protected that market, and disposed of
24 tons of catalogs and flyers mailed by Quill into the State
every year.  Id., at 218219.  Based on these facts, the court
concluded that Quill's ``economic presence'' in North Dakota
depended on services and benefits provided by the State
and therefore generated ``a constitutionally sufficient nexus
to justify imposition of the purely administrative duty of
collecting and remitting the use tax.''  Id., at 219.
                   II
       As in a number of other cases involving the application of
state taxing statutes to out-of-state sellers, our holding in
Bellas Hess relied on both the Due Process Clause and the
Commerce Clause.  Although the ``two claims are closely
related,'' Bellas Hess, 386 U. S., at 756, the clauses pose
distinct limits on the taxing powers of the States.  Accord-
ingly, while a State may, consistent with the Due Process
Clause, have the authority to tax a particular taxpayer,
imposition of the tax may nonetheless violate the Commerce
Clause.  See, e. g., Tyler Pipe Industries, Inc. v. Washington
State Dept. of Revenue, 483 U. S. 232 (1987).
       The two constitutional requirements differ fundamentally,
in several ways.  As discussed at greater length below, see
infra, at Part IV, the Due Process Clause and the Com-
merce Clause reflect different constitutional concerns.
Moreover, while Congress has plenary power to regulate
commerce among the States and thus may authorize state
actions that burden interstate commerce, see International
Shoe Co. v. Washington, 326 U. S. 310, 315 (1945), it does
not similarly have the power to authorize violations of the
Due Process Clause.
       Thus, although we have not always been precise in
distinguishing between the two, the Due Process Clause
and the Commerce Clause are analytically distinct.
          ```Due process' and `commerce clause' conceptions are
         not always sharply separable in dealing with these
         problems. . . .  To some extent they overlap.  If there is
         a want of due process to sustain the tax, by that fact
         alone any burden the tax imposes on the commerce
         among the states becomes `undue.'  But, though
         overlapping, the two conceptions are not identical.
         There may be more than sufficient factual connections,
         with economic and legal effects, between the transac-
         tion and the taxing state to sustain the tax as against
         due process objections.  Yet it may fall because of its
         burdening effect upon the commerce.  And, although
         the two notions cannot always be separated, clarity
         of consideration and of decision would be promoted
         if the two issues are approached, where they are pre-
         sented, at least tentatively as if they were separate
         and distinct, not intermingled ones.''  International
         Harvester Co. v. Department of Treasury, 322 U. S. 340,
         353 (1944) (Rutledge, J., concurring in part and dis-
senting in part).
Heeding Justice Rutledge's counsel, we consider each con-
stitutional limit in turn.
                                III
       The Due Process Clause ``requires some definite link,
some minimum connection, between a state and the person,
property or transaction it seeks to tax,'' Miller Bros. Co. v.
Maryland, 347 U. S. 340, 344345 (1954), and that the
``income attributed to the State for tax purposes must be
rationally related to `values connected with the taxing
State.'''  Moorman Mfg. Co. v. Bair, 437 U. S. 267, 273
(1978) (citation omitted).  Here, we are concerned primarily
with the first of these requirements.  Prior to Bellas Hess,
we had held that that requirement was satisfied in a
variety of circumstances involving use taxes.  For example,
the presence of sales personnel in the State, or the main-
tenance of local retail stores in the State, justified the
exercise of that power because the seller's local activities
were ``plainly accorded the protection and services of the
taxing State.''  Bellas Hess, 386 U. S., at 757.  The furthest
extension of that power was recognized in Scripto, Inc. v.
Carson, 362 U. S. 207 (1960), in which the Court upheld a
use tax despite the fact that all of the seller's in-state
solicitation was performed by independent contractors.
These cases all involved some sort of physical presence
within the State, and in Bellas Hess the Court suggested
that such presence was not only sufficient for jurisdiction
under the Due Process Clause, but also necessary.  We
expressly declined to obliterate the ``sharp distinction . . .
between mail order sellers with retail outlets, solicitors, or
property within a State, and those who do no more than
communicate with customers in the State by mail or
common carrier as a part of a general interstate business.''
386 U. S., at 758.
       Our due process jurisprudence has evolved substantially
in the 25 years since Bellas Hess, particularly in the area
of judicial jurisdiction.  Building on the seminal case of
International Shoe Co. v. Washington, 326 U. S. 310 (1945),
we have framed the relevant inquiry as whether a defen-
dant had minimum contacts with the jurisdiction ``such that
the maintenance of the suit does not offend `traditional
notions of fair play and substantial justice.'''  Id., at 316
(quoting Milliken v. Meyer, 311 U. S. 457, 463 (1940)).  In
that spirit, we have abandoned more formalistic tests that
focused on a defendant's ``presence'' within a State in favor
of a more flexible inquiry into whether a defendant's
contacts with the forum made it reasonable, in the context
of our federal system of government, to require it to defend
the suit in that State.  In Shaffer v. Heitner, 433 U. S. 186,
212 (1977), the Court extended the flexible approach that
International Shoe had prescribed for purposes of in
personam jurisdiction to in rem jurisdiction, concluding that
``all assertions of state-court jurisdiction must be evaluated
according to the standards set forth in International Shoe
and its progeny.''
       Applying these principles, we have held that if a foreign
corporation purposefully avails itself of the benefits of an
economic market in the forum State, it may subject itself to
the State's in personam jurisdiction even if it has no
physical presence in the State.  As we explained in Burger
King Corp. v. Rudzewicz, 471 U. S. 462 (1985):
       ``Jurisdiction in these circumstances may not be
         avoided merely because the defendant did not physical-
         ly enter the forum State.  Although territorial presence
         frequently will enhance a potential defendant's affilia-
         tion with a State and reinforce the reasonable foresee-
         ability of suit there, it is an inescapable fact of modern
         commercial life that a substantial amount of business
         is transacted solely by mail and wire communications
         across state lines, thus obviating the need for physical
         presence within a State in which business is conducted.
         So long as a commercial actor's efforts are `purposefully
         directed' toward residents of another State, we have
         consistently rejected the notion that an absence of
         physical contacts can defeat personal jurisdiction
         there.''  Id., at 476 (emphasis in original).
       Comparable reasoning justifies the imposition of the
collection duty on a mail-order house that is engaged in
continuous and widespread solicitation of business within
a State.  Such a corporation clearly has ``fair warning that
[its] activity may subject [it] to the jurisdiction of a foreign
sovereign.''  Shaffer v. Heitner, 433 U. S., at 218 (Stevens,
J., concurring in judgment).  In ``modern commercial life'' it
matters little that such solicitation is accomplished by a
deluge of catalogs rather than a phalanx of drummers:  the
requirements of due process are met irrespective of a
corporation's lack of physical presence in the taxing State.
Thus, to the extent that our decisions have indicated that
the Due Process Clause requires physical presence in a
State for the imposition of duty to collect a use tax, we
overrule those holdings as superseded by developments in
the law of due process.
       In this case, there is no question that Quill has purpose-
fully directed its activities at North Dakota residents, that
the magnitude of those contacts are more than sufficient for
due process purposes, and that the use tax is related to the
benefits Quill receives from access to the State.  We
therefore agree with the North Dakota Supreme Court's
conclusion that the Due Process Clause does not bar
enforcement of that State's use tax against Quill.

                                IV
       Article I, 8, cl. 3 of the Constitution expressly authorizes
Congress to ``regulate Commerce with foreign Nations, and
among the several States.''  It says nothing about the
protection of interstate commerce in the absence of any
action by Congress.  Nevertheless, as Justice Johnson
suggested in his concurring opinion in Gibbons v. Ogden, 9
Wheat. 1, 231232, 239 (1824), the Commerce Clause is
more than an affirmative grant of power; it has a negative
sweep as well.  The clause, in Justice Stone's phrasing, ``by
its own force'' prohibits certain state actions that interfere
with interstate commerce.  South Carolina State Highway
Dept. v. Barnwell Bros., Inc., 303 U. S. 177, 185 (1938).
       Our interpretation of the ``negative'' or ``dormant'' Com-
merce Clause has evolved substantially over the years,
particularly as that clause concerns limitations on state
taxation powers.  See generally, P. Hartman, Federal
Limitations on State and Local Taxation 2:92:17 (1981).
Our early cases, beginning with Brown v. Maryland, 12
Wheat. 419 (1827), swept broadly, and in Leloup v. Port of
Mobile, 127 U. S. 640, 648 (1888), we declared that ``no
State has the right to lay a tax on interstate commerce in
any form.''  We later narrowed that rule and distinguished
between direct burdens on interstate commerce, which were
prohibited, and indirect burdens, which generally were not.
See, e. g., Sanford v. Poe, 69 F. 546 (CA6 1895), aff'd sub
nom. Adams Express Co. v. Ohio State Auditor, 165 U. S.
194, 220 (1897).  Western Live Stock v. Bureau of Revenue,
303 U. S. 250, 256258 (1938), and subsequent decisions
rejected this formal, categorical analysis and adopted a
``multiple-taxation doctrine'' that focused not on whether a
tax was ``direct'' or ``indirect'' but rather on whether a tax
subjected interstate commerce to a risk of multiple taxation.
However, in Freeman v. Hewit, 329 U. S. 249, 256 (1946),
we embraced again the formal distinction between direct
and indirect taxation, invalidating Indiana's imposition of
a gross receipts tax on a particular transaction because that
application would ``impos[e] a direct tax on interstate sales.''
Most recently, in Complete Auto Transit, Inc. v. Brady, 430
U. S. 274, 285 (1977), we renounced the Freeman approach
as ``attaching constitutional significance to a semantic
difference.''  We expressly overruled one of Freeman's
progeny, Spector Motor Service, Inc. v. O'Connor, 340 U. S.
602 (1951), which held that a tax on ``the privilege of doing
interstate business'' was unconstitutional, while recognizing
that a differently denominated tax with the same economic
effect would not be unconstitutional.  Spector, as we
observed in Railway Express Agency, Inc. v. Virginia, 358
U. S. 434, 441 (1959), created a situation in which ``magic
words or labels'' could ``disable an otherwise constitutional
levy.''  Complete Auto emphasized the importance of looking
past ``the formal language of the tax statute [to] its practical
effect,'' Complete Auto, 430 U. S., at 279, and set forth a
four-part test that continues to govern the validity of state
taxes under the Commerce Clause.
       Bellas Hess was decided in 1967, in the middle of this
latest rally between formalism and pragmatism.  Contrary
to the suggestion of the North Dakota Supreme Court, this
timing does not mean that Complete Auto rendered Bellas
Hess ``obsolete.''  Complete Auto rejected Freeman and
Spector's formal distinction between ``direct'' and ``indirect''
taxes on interstate commerce because that formalism
allowed the validity of statutes to hinge on ``legal terminol-
ogy,'' ``draftsmanship and phraseology.''  430 U. S., at 281.
Bellas Hess did not rely on any such labeling of taxes and
therefore did not automatically fall with Freeman and its
progeny.
       While contemporary Commerce Clause jurisprudence
might not dictate the same result were the issue to arise for
the first time today, Bellas Hess is not inconsistent with
Complete Auto and our recent cases.  Under Complete Auto's
four-part test, we will sustain a tax against a Commerce
Clause challenge so long as the ``tax [1] is applied to an
activity with a substantial nexus with the taxing State, [2]
is fairly apportioned, [3] does not discriminate against
interstate commerce, and [4] is fairly related to the services
provided by the State.''  430 U. S., at 279.  Bellas Hess
concerns the first of these tests and stands for the proposi-
tion that a vendor whose only contacts with the taxing
State are by mail or common carrier lacks the ``substantial
nexus'' required by the Commerce Clause.
       Thus, three weeks after Complete Auto was handed down,
we cited Bellas Hess for this proposition and discussed the
case at some length.  In National Geographic Society v.
California Bd. of Equalization, 430 U. S. 551, 559 (1977),
we affirmed the continuing vitality of Bellas Hess' ``sharp
distinction . . . between mail-order sellers with [a physical
presence in the taxing] State and those . . . who do no more
than communicate with customers in the State by mail or
common carrier as part of a general interstate business.''
We have continued to cite Bellas Hess with approval ever
since.  For example, in Goldberg v. Sweet, 488 U. S. 252,
263 (1989), we expressed ``doubt that termination of an
interstate telephone call, by itself, provides a substantial
enough nexus for a State to tax a call.  See National Bellas
Hess . . . (receipt of mail provides insufficient nexus).''  See
also D. H. Holmes Co. v. McNamara, 486 U. S. 24, 33
(1988); Commonwealth Edison Co. v. Montana, 453 U. S.
609, 626 (1981); Mobil Oil Corp. v. Commissioner of Taxes,
445 U. S., at 437; National Geographic Society, 430 U. S.,
at 559.  For these reasons, we disagree with the State Su-
preme Court's conclusion that our decision in Complete Auto
undercut the Bellas Hess rule.
       The State of North Dakota relies less on Complete Auto
and more on the evolution of our due process jurisprudence.
The State contends that the nexus requirements imposed by
the Due Process and Commerce Clauses are equivalent and
that if, as we concluded above, a mail-order house that
lacks a physical presence in the taxing State nonetheless
satisfies the due process ``minimum contacts'' test, then that
corporation also meets the Commerce Clause ``substantial
nexus'' test.  We disagree.  Despite the similarity in
phrasing, the nexus requirements of the Due Process and
Commerce Clauses are not identical.  The two standards
are animated by different constitutional concerns and
policies.
       Due process centrally concerns the fundamental fairness
of governmental activity.  Thus, at the most general level,
the due process nexus analysis requires that we ask
whether an individual's connections with a State are
substantial enough to legitimate the State's exercise of
power over him.  We have, therefore, often identified
``notice'' or ``fair warning'' as the analytic touchstone of due
process nexus analysis.  In contrast, the Commerce Clause,
and its nexus requirement, are informed not so much by
concerns about fairness for the individual defendant as by
structural concerns about the effects of state regulation on
the national economy.  Under the Articles of Confederation,
State taxes and duties hindered and suppressed interstate
commerce; the Framers intended the Commerce Clause as
a cure for these structural ills.  See generally The Federal-
ist Nos. 7, 11 (A. Hamilton).  It is in this light that we have
interpreted the negative implication of the Commerce
Clause.  Accordingly, we have ruled that that Clause
prohibits discrimination against interstate commerce, see,
e. g., Philadelphia v. New Jersey, 437 U. S. 617 (1978), and
bars state regulations that unduly burden interstate
commerce, see, e. g., Kassel v. Consolidated Freightways
Corp. of Del., 450 U. S. 662 (1981).
       The Complete Auto analysis reflects these concerns about
the national economy.  The second and third parts of that
analysis, which require fair apportionment and non-
discrimination, prohibit taxes that pass an unfair share of
the tax burden onto interstate commerce.  The first and
fourth prongs, which require a substantial nexus and a
relationship between the tax and State-provided services,
limit the reach of State taxing authority so as to ensure
that State taxation does not unduly burden interstate
commerce.  Thus, the ``substantial-nexus'' requirement is
not, like due process' ``minimum-contacts'' requirement, a
proxy for notice, but rather a means for limiting state
burdens on interstate commerce.  Accordingly, contrary to
the State's suggestion, a corporation may have the ``mini-
mum contacts'' with a taxing State as required by the Due
Process Clause, and yet lack the ``substantial nexus'' with
that State as required by the Commerce Clause.
      The State Supreme Court reviewed our recent Commerce
Clause decisions and concluded that those rulings signalled
a ``retreat from the formalistic constrictions of a stringent
physical presence test in favor of a more flexible substan-
tive approach'' and thus supported its decision not to apply
Bellas Hess.  470 N. W. 2d, at 214 (citing Standard Pressed
Steel Co. v. Department of Revenue of Wash., 419 U. S. 560
(1975), and Tyler Pipe Industries, Inc. v. Washington State
Dept. of Revenue, 483 U. S. 232 (1987)).  Although we agree
with the State Court's assessment of the evolution of our
cases, we do not share its conclusion that this evolution
indicates that the Commerce Clause ruling of Bellas Hess
is no longer good law.
       First, as the State Court itself noted, 470 N. W. 2d, at
214, all of these cases involved taxpayers who had a
physical presence in the taxing State and therefore do not
directly conflict with the rule of Bellas Hess or compel that
it be overruled.  Second, and more importantly, although
our Commerce Clause jurisprudence now favors more
flexible balancing analyses, we have never intimated a
desire to reject all established ``bright-line'' tests.  Although
we have not, in our review of other types of taxes, articulat-
ed the same physical-presence requirement that Bellas Hess
established for sales and use taxes, that silence does not
imply repudiation of the Bellas Hess rule.
       Complete Auto, it is true, renounced Freeman and its
progeny as ``formalistic.''  But not all formalism is alike.
Spector's formal distinction between taxes on the ``privilege
of doing business'' and all other taxes served no purpose
within our Commerce Clause jurisprudence, but stood ``only
as a trap for the unwary draftsman.''  Complete Auto, 430
U. S., at 279.  In contrast, the bright-line rule of Bellas
Hess furthers the ends of the dormant Commerce Clause.
Undue burdens on interstate commerce may be avoided not
only by a case-by-case evaluation of the actual burdens
imposed by particular regulations or taxes, but also, in
some situations, by the demarcation of a discrete realm of
commercial activity that is free from interstate taxation.
Bellas Hess followed the latter approach and created a safe
harbor for vendors ``whose only connection with customers
in the [taxing] State is by common carrier or the United
States mail.''  Under Bellas Hess, such vendors are free
from state-imposed duties to collect sales and use taxes.
       Like other bright-line tests, the Bellas Hess rule appears
artificial at its edges:  whether or not a State may compel
a vendor to collect a sales or use tax may turn on the
presence in the taxing State of a small sales force, plant, or
office.  Cf. National Geographic Society v. California Bd. of
Equalization, 430 U. S. 551 (1977); Scripto, Inc. v. Carson,
362 U. S. 207 (1960).  This artificiality, however, is more
than offset by the benefits of a clear rule.  Such a rule
firmly establishes the boundaries of legitimate state
authority to impose a duty to collect sales and use taxes
and reduces litigation concerning those taxes.  This benefit
is important, for as we have so frequently noted, our law in
this area is something of a ``quagmire'' and the ``application
of constitutional principles to specific state statutes leaves
much room for controversy and confusion and little in the
way of precise guides to the States in the exercise of their
indispensable power of taxation.''  Northwestern States
Portland Cement Co. v. Minnesota, 358 U. S. 450, 457458
(1959).
       Moreover, a bright-line rule in the area of sales and use
taxes also encourages settled expectations and, in doing so,
fosters investment by businesses and individuals.  Indeed,
it is not unlikely that the mail-order industry's dramatic
growth over the last quarter-century is due in part to the
bright-line exemption from state taxation created in Bellas
Hess.
       Notwithstanding the benefits of bright-line tests, we
have, in some situations, decided to replace such tests with
more contextual balancing inquiries.  For example, in
Arkansas Electric Cooperative Corp. v. Arkansas Pub. Serv.
Comm'n, 461 U. S. 375 (1983), we reconsidered a bright-line
test set forth in Public Utilities Comm'n of R. I. v. Attleboro
Steam & Electric Co., 273 U. S. 83 (1927).  Attleboro
distinguished between state regulation of wholesale sales of electricity,
which was constitutional as an ``indirect''
regulation of interstate commerce, and state regulation of
retail sales of electricity, which was unconstitutional as a
``direct regulation'' of commerce.  In Arkansas Electric, we
considered whether to ``follow the mechanical test set out in
Attleboro, or the balance-of-interests test applied in our
Commerce Clause cases.''  Arkansas Electric Cooperative
Corp., 461 U. S., at 390391.  We first observed that ``the
principle of stare decisis counsels us, here as elsewhere, not
lightly to set aside specific guidance of the sort we find in
Attleboro.''  Id., at 391.  In deciding to reject the Attleboro
analysis, we were influenced by the fact that the ``mechani-
cal test'' was ``anachronistic,'' that the Court had rarely
relied on the test, and that we could ``see no strong reliance
interests'' that would be upset by the rejection of that test.
Id., at 391392.  None of those factors obtains in this case.
First, the Attleboro rule was ``anachronistic'' because it
relied on formal distinctions between ``direct'' and ``indirect''
regulation (and on the regulatory counterparts of our
Freeman line of cases); as discussed above, Bellas Hess
turned on a different logic and thus remained sound after
the Court repudiated an analogous distinction in Complete
Auto.  Second, unlike the Attleboro rule, we have, in our
decisions, frequently relied on the Bellas Hess rule in the
last 25 years, see supra, at 11, and we have never intimat-
ed in our review of sales or use taxes that Bellas Hess was
unsound.  Finally, again unlike the Attleboro rule, the
Bellas Hess rule has engendered substantial reliance and
has become part of the basic framework of a sizeable
industry.  The ``interest in stability and orderly develop-
ment of the law'' that undergirds the doctrine of stare
decisis, see Runyon v. McCrary, 427 U.S. 160, 190191
(1976) (Stevens, J., concurring), therefore counsels adher-
ence to settled precedent.
    In sum, although in our cases subsequent to Bellas Hess
and concerning other types of taxes we have not adopted a
similar bright-line, physical-presence requirement, our
reasoning in those cases does not compel that we now reject
the rule that Bellas Hess established in the area of sales
and use taxes.  To the contrary, the continuing value of a
bright-line rule in this area and the doctrine and principles
of stare decisis indicate that the Bellas Hess rule remains
good law.  For these reasons, we disagree with the North
Dakota Supreme Court's conclusion that the time has come
to renounce the bright-line test of Bellas Hess.
       This aspect of our decision is made easier by the fact that
the underlying issue is not only one that Congress may be
better qualified to resolve, but also one that Congress
has the ultimate power to resolve.  No matter how we
evaluate the burdens that use taxes impose on interstate
commerce, Congress remains free to disagree with our
conclusions.  See Prudential Insurance Co. v. Benjamin, 328
U. S. 408 (1946).  Indeed, in recent years Congress has
considered legislation that would ``overrule'' the Bellas Hess
rule.  Its decision not to take action in this direction
may, of course, have been dictated by respect for our
holding in Bellas Hess that the Due Process Clause prohib-
its States from imposing such taxes, but today we have put
that problem to rest.  Accordingly, Congress is now free to
decide whether, when, and to what extent the States may
burden interstate mail-order concerns with a duty to collect
use taxes.
       Indeed, even if we were convinced that Bellas Hess was
inconsistent with our Commerce Clause jurisprudence, ``this
very fact [might] giv[e us] pause and counse[l] withholding
our hand, at least for now.  Congress has the power to
protect interstate commerce from intolerable or even
undesirable burdens.''  Commonwealth Edison Co. v.
Montana, 453 U. S. 609, 637 (1981) (White, J., concurring).
In this situation, it may be that ``the better part of both
wisdom and valor is to respect the judgment of the other
branches of the Government.''  Id., at 638.
       The judgment of the Supreme Court of North Dakota is
reversed and the case is remanded for further proceedings
not inconsistent with this opinion.
                                         It is so ordered.



     SUPREME COURT OF THE UNITED STATES
            No. 91-194
 
QUILL CORPORATION, PETITIONER v. NORTH
    DAKOTA by and through its TAX COMMIS-
           SIONER, HEIDI HEITKAMP
on writ of certiorari to the supreme court of
                north dakota
               [May 26, 1992]

  Justice Scalia, with whom Justice Kennedy and
Justice Thomas join, concurring in part and concurring in
the judgment.
  National Bellas Hess, Inc. v. Department of Revenue of
Ill., 386 U. S. 753 (1967), held that the Due Process and
Commerce Clauses of the Constitution prohibit a State from
imposing the duty of use-tax collection and payment upon
a seller whose only connection with the State is through
common carrier or the United States mail.  I agree with the
Court that the Due Process Clause holding of Bellas Hess
should be overruled.  Even before Bellas Hess, we had held,
correctly I think, that state regulatory jurisdiction could be
asserted on the basis of contacts with the State through the
United States mail.  See Travelers Health Assn. v. Virginia
ex rel. State Corp. Comm'n, 339 U. S. 643, 646650 (1950)
(Blue Sky laws).  It is difficult to discern any principled
basis for distinguishing between jurisdiction to regulate and
jurisdiction to tax.  As an original matter, it might have
been possible to distinguish between jurisdiction to tax and
jurisdiction to compel collection of taxes as agent for the
State, but we have rejected that.  National Geographic Soc.
v. California Bd. of Equalization, 430 U. S. 551, 558 (1977);
Scripto, Inc. v. Carson, 362 U. S. 207, 211 (1960).  I agree
with the Court, moreover, that abandonment of Bellas
Hess's due process holding is compelled by reasoning  [c]om-
parable to that contained in our post-1967 cases dealing
with state jurisdiction to adjudicate.  Ante, at 8.  I do not
understand this to mean that the due process standards for
adjudicative jurisdiction and those for legislative (or
prescriptive) jurisdiction are necessarily identical; and on
that basis I join Parts I, II, and III of the Court's opinion.
Compare Asahi Metal Industry Co. v. Superior Court, 480
U. S. 102 (1987) with American Oil Co. v. Neill, 380 U. S.
451 (1965).
  I also agree that the Commerce Clause holding of Bellas
Hess should not be overruled.  Unlike the Court, however,
I would not revisit the merits of that holding, but would
adhere to it on the basis of stare decisis.  American Truck-
ing Assns., Inc. v. Smith, 496 U. S. 167, 204 (1990) (Scalia,
J., concurring in judgment).  Congress has the final say
over regulation of interstate commerce, and it can change
the rule of Bellas Hess by simply saying so.  We have long
recognized that the doctrine of stare decisis has  special
force where  Congress remains free to alter what we have
done.  Patterson v. McLean Credit Union, 491 U. S. 164,
172173 (1989).  See also Hilton v. South Carolina Pub.
Railways Comm'n, 502 U. S. ___, ___ (1991) (slip op., at 4);
Illinois Brick Co. v. Illinois, 431 U. S. 720, 736 (1977).
Moreover, the demands of the doctrine are  at their acme
. . . where reliance interests are involved, Payne v. Tennes-
see, 501 U. S. ___, ___ (1991) (slip op., at 18).  As the Court
notes,  the Bellas Hess rule has engendered substantial
reliance and has become part of the basic framework of a
sizeable industry, ante, at 17.
  I do not share Justice White's view that we may dis-
regard these reliance interests because it has become
unreasonable to rely upon Bellas Hess, post, at 1112.
Even assuming for the sake of argument (I do not consider
the point) that later decisions in related areas are inconsis-
tent with the principles upon which Bellas Hess rested, we
have never acknowledged that, but have instead carefully
distinguished the case on its facts.  See, e.g., D. H. Holmes
Co. v. McNamara, 486 U. S. 24, 33 (1988); National
Geographic Soc., supra, at 559.  It seems to me important
that we retain our ability"and, what comes to the same
thing, that we maintain public confidence in our abili-
ty"sometimes to adopt new principles for the resolution of
new issues without abandoning clear holdings of the past
that those principles contradict.  We seemed to be doing
that in this area.  Having affirmatively suggested that the
 physical presence rule could be reconciled with our new
jurisprudence, we ought not visit economic hardship upon
those who took us at our word.  We have recently told lower
courts that  [i]f a precedent of this Court has direct applica-
tion in a case, yet appears to rest on reasons rejected in
some other line of decisions, [they] should follow the case
which directly controls, leaving to this Court the preroga-
tive of overruling its own decisions.  Rodriguez de Quijas
v. Shearson/American Express, Inc., 490 U. S. 477, 484
(1989).  It is strangely incompatible with this to demand
that private parties anticipate our overrulings.  It is my
view, in short, that reliance upon a square, unabandoned
holding of the Supreme Court is always justifiable reliance
(though reliance alone may not always carry the day).
Finally, the  physical presence rule established in Bellas
Hess is not  unworkable, Patterson, supra, at 173; to the
contrary, whatever else may be the substantive pros and
cons of the rule, the  bright-line regime that it establishes,
see ante, at 1516, is unqualifiedly in its favor.  Justice
White's concern that reaffirmance of Bellas Hess will lead
to a flurry of litigation over the meaning of  physical
presence, see post, at 10, seems to me contradicted by 25
years of experience under the decision.
  For these reasons, I concur in the judgment of the Court
and join Parts I, II, and III of its opinion.



              SUPREME COURT OF THE UNITED STATES
                       No. 91-194
 
         QUILL CORPORATION, PETITIONER v. NORTH
               DAKOTA by and through its TAX COMMIS-
                      SIONER, HEIDI HEITKAMP
           on writ of certiorari to the supreme court of
                           north dakota
                          [May 26, 1992]

       Justice White, concurring in part and dissenting in part.
       Today the Court repudiates that aspect of our decision in
National Bellas Hess, Inc. v. Department of Revenue of Ill.,
386 U. S. 753 (1967), which restricts, under the Due Process
Clause of the Fourteenth Amendment, the power of the
States to impose use tax collection responsibilities on out-of-
state mail order businesses that do not have a ``physical
presence'' in the State.  The Court stops short, however, of
giving Bellas Hess the complete burial it justly deserves.  In
my view, the Court should also overrule that part of Bellas
Hess which justifies its holding under the Commerce
Clause.  I, therefore, respectfully dissent from Part IV.

                                 I
       In Part IV of its opinion, the majority goes to some
lengths to justify the Bellas Hess physical presence require-
ment under our Commerce Clause jurisprudence.  I am
unpersuaded by its interpretation of our cases.  In Bellas
Hess, the majority placed great weight on the interstate
quality of the mail order sales, stating that ``it is difficult to
conceive of commercial transactions more exclusively
interstate in character than the mail order transactions
here involved.''  Bellas Hess, supra, at 759.  As the majority
correctly observes, the idea of prohibiting States from
taxing ``exclusively interstate'' transactions had been an
important part of our jurisprudence for many decades,
ranging intermittently from such cases as Case of State
Freight Tax, 15 Wall. 232, 279 (1873), through Freeman v.
Hewit, 329 U. S. 249, 256 (1946), and Spector Motor Service,
Inc. v. O'Connor, 340 U. S. 602 (1951).  But though it
recognizes that Bellas Hess was decided amidst an upheaval
in our Commerce Clause jurisprudence, in which we began
to hold that ``a State, with proper drafting, may tax exclu-
sively interstate commerce so long as the tax does not
create any effect forbidden by the Commerce Clause,''
Complete Auto Transit, Inc. v. Brady, 430 U. S. 274, 285
(1977), the majority draws entirely the wrong conclusion
from this period of ferment.
       The Court attempts to paint Bellas Hess in a different
hue from Freeman and Spector because the former ``did not
rely'' on labeling taxes that had ``direct'' and ``indirect''
effects on interstate commerce.  See ante, at 1011.  Thus,
the Court concludes, Bellas Hess ``did not automatically fall
with Freeman and its progeny'' in our decision in Complete
Auto.  See id., at 11.  I am unpersuaded by this attempt to
distinguish Bellas Hess from Freeman and Spector, both of
which were repudiated by this Court.  See Complete Auto,
supra, at 288289, and n.15.  What we disavowed in Com-
plete Auto was not just the ``formal distinction between
`direct' and `indirect' taxes on interstate commerce,'' ante, at
10, but also the whole notion underlying the Bellas Hess
physical presence rule"that ``interstate commerce is
immune from state taxation.''  Complete Auto, supra, at 288.
       The Court compounds its misreading by attempting to
show that Bellas Hess ``is not inconsistent with Complete
Auto and our recent cases.''  Ante, at 11.  This will be news
to commentators, who have rightly criticized Bellas Hess.
Indeed, the majority displays no small amount of audacity
in claiming that our decision in National Geographic Society
v. California Bd. of Equalization, 430 U. S. 551, 559 (1977),
which was rendered several weeks after Complete Auto,
reaffirmed the continuing vitality of Bellas Hess.  See ante,
at 11.
       Our decision in that case did just the opposite.  National
Geographic held that the National Geographic Society was
liable for use tax collection responsibilities in California.
The Society conducted an out-of-state mail order business
similar to the one at issue here and in Bellas Hess, and in
addition, maintained two small offices in California that
solicited advertisements for National Geographic Magazine.
The Society argued that its physical presence in California
was unrelated to its mail order sales, and thus that the
Bellas Hess rule compelled us to hold that the tax collection
responsibilities could not be imposed.  We expressly rejected
that view, holding that the ``requisite nexus for requiring an
out-of-state seller [the Society] to collect and pay the use
tax is not whether the duty to collect the use tax relates to
the seller's activities carried on within the State, but simply
whether the facts demonstrate `some definite link, some
minimum connection, between (the State and) the person
. . . it seeks to tax.'''  430 U. S., at 561 (citation omitted).
       By decoupling any notion of a transactional nexus from
the inquiry, the National Geographic Court in fact repudiat-
ed the free trade rationale of the Bellas Hess majority.
Instead, the National Geographic Court relied on a due
process-type minimum contacts analysis that examined
whether a link existed between the seller and the State
wholly apart from the seller's in-state transaction that was
being taxed.  Citations to Bellas Hess notwithstanding, see
430 U. S., at 559, it is clear that rather than adopting the
rationale of Bellas Hess, the National Geographic Court was
instead politely brushing it aside.  Even were I to agree
that the free trade rationale embodied in Bellas Hess' rule
against taxes of purely interstate sales was required by our
cases prior to 1967, therefore, I see no basis in the
majority's opening premise that this substantive underpin-
ning of Bellas Hess has not since been disavowed by our
cases.
                                II
       The Court next launches into an uncharted and treacher-
ous foray into differentiating between the ``nexus'' require-
ments under the Due Process and Commerce Clauses.  As
the Court explains, ``[d]espite the similarity in phrasing, the
nexus requirements of the Due Process and Commerce
Clauses are not identical.  The two standards are animated
by different constitutional concerns and policies.''  Ante, at
12.  The due process nexus, which the Court properly holds
is met in this case, see ante, at Part III, ``concerns the
fundamental fairness of governmental activity.''  Ante, at
12.  The Commerce Clause nexus requirement, on the other
hand, is ``informed not so much by concerns about fairness
for the individual defendant as by structural concerns about
the effects of state regulation on the national economy.''
Ibid.
       Citing Complete Auto, the Court then explains that the
Commerce Clause nexus requirement is not ``like due
process' `minimum-contacts' requirement, a proxy for notice,
but rather a means for limiting state burdens on interstate
commerce.''  Ante, at 13.  This is very curious, because parts
two and three of the Complete Auto test, which require fair
apportionment and nondiscrimination in order that inter-
state commerce not be unduly burdened, now appear to
become the animating features of the nexus requirement,
which is the first prong of the Complete Auto inquiry.  The
Court freely acknowledges that there is no authority for
this novel interpretation of our cases and that we have
never before found, as we do in this case, sufficient contacts
for due process purposes but an insufficient nexus under
the Commerce Clause.  See ante, at 1314, and n.6.
       The majority's attempt to disavow language in our
opinions acknowledging the presence of due process
requirements in the Complete Auto test is also unpersua-
sive.  See ante, at 1314, n. 6 (citing Trinova Corp. v.
Michigan Dept. of Treasury, 498 U. S. ___, ___ (1991) (slip
op., at "")).  Instead of explaining the doctrinal origins of
the Commerce Clause nexus requirement, the majority
breezily announces the rule and moves on to other matters.
See ante, at 1314.  In my view, before resting on the
assertion that the Constitution mandates inquiry into two
readily distinct ``nexus'' requirements, it would seem
prudent to discern the origins of the ``nexus'' requirement in
order better to understand whether the Court's concern
traditionally has been with the fairness of a State's tax or
some other value.
       The cases from which the Complete Auto Court derived
the nexus requirement in its four-part test convince me that
the issue of ``nexus'' is really a due process fairness inquiry.
In explaining the sources of the four-part inquiry in
Complete Auto, the Court relied heavily on Justice
Rutledge's separate concurring opinion in Freeman v. Hewit,
329 U. S. 249 (1946), the case whose majority opinion the
Complete Auto Court was in the process of comprehensively
disavowing.  Instead of the formalistic inquiry into whether
the State was taxing interstate commerce, the Complete
Auto Court adopted the more functionalist approach of
Justice Rutledge in Freeman.  See Complete Auto, 430 U. S.,
at 280281.  In conducting his inquiry, Justice Rutledge
used language that by now should be familiar, arguing that
a tax was unconstitutional if the activity lacked a sufficient
connection to the State to give ``jurisdiction to tax,'' Free-
man, supra, at 271; or if the tax discriminated against
interstate commerce; or if the activity was subjected to
multiple tax burdens.  329 U.S., at 276277.  Justice
Rutledge later refined these principles in Memphis Natural
Gas Co. v. Stone, 335 U. S. 80 (1948), in which he described
the principles that the Complete Auto Court would later
substantially adopt:  ``[I]t is enough for me to sustain the
tax imposed in this case that it is one clearly within the
state's power to lay insofar as any limitation of due process
or `jurisdiction to tax' in that sense is concerned; it is
nondiscriminatory . . . ; [it] is duly apportioned . . .; and
cannot be repeated by any other state.''  335 U.S., at 9697
(concurring opinion)(footnotes omitted).
       By the time the Court decided Northwestern States
Portland Cement Co. v. Minnesota, 358 U. S. 450 (1959),
Justice Rutledge was no longer on the Court, but his view
of the nexus requirement as grounded in the Due Process
Clause was decisively adopted.  In rejecting challenges to a
state tax based on the Due Process and Commerce Clauses,
the Court stated that ``[t]he taxes imposed are levied only
on that portion of the taxpayer's net income which arises
from its activities within the taxing State.  These activities
form a sufficient `nexus between such a tax and transac-
tions within a state for which the tax is an exaction.'''  Id.,
at 464 (citation omitted).  The Court went on to observe
that ``[i]t strains reality to say, in terms of our decisions,
that each of the corporations here was not sufficiently
involved in local events to forge `some definite link, some
minimum connection' sufficient to satisfy due process
requirements.''  Id., at 464465 (quoting Miller Bros. v.
Maryland, 347 U. S. 340, 344345 (1954)).  When the Court
announced its four-part synthesis in Complete Auto, the
nexus requirement was definitely traceable to concerns
grounded in the Due Process Clause, and not the Commerce
Clause, as the Court's discussion of the doctrinal anteced-
ents for its rule made clear.  See Complete Auto, supra, at
281282, 285.  For the Court now to assert that our
Commerce Clause jurisprudence supports a separate notion
of nexus is without precedent or explanation.
       Even were there to be such an independent requirement
under the Commerce Clause, there is no relationship
between the physical presence/nexus rule the Court retains
and Commerce Clause considerations that allegedly justify
it.  Perhaps long ago a seller's ``physical presence'' was a
sufficient part of a trade to condition imposition of a tax on
such presence.  But in today's economy, physical presence
frequently has very little to do with a transaction a State
might seek to tax.  Wire transfers of money involving
billions of dollars occur every day; purchasers place orders
with sellers by fax, phone, and computer linkup; sellers ship
goods by air, road, and sea through sundry delivery services
without leaving their place of business.  It is certainly true
that the days of the door-to-door salesperson are not gone.
Nevertheless, an out-of-state direct marketer derives
numerous commercial benefits from the State in which it
does business.  These advantages include laws establishing
sound local banking institutions to support credit transac-
tions; courts to insure collection of the purchase price from
the seller's customers; means of waste disposal from
garbage generated by mail order solicitations; and creation
and enforcement of consumer protection laws, which protect
buyers and sellers alike, the former by ensuring that they
will have a ready means of protecting against fraud, and
the latter by creating a climate of consumer confidence that
inures to the benefit of reputable dealers in mail order
transactions.  To create, for the first time, a nexus require-
ment under the Commerce Clause independent of that
established for due process purposes is one thing; to
attempt to justify an anachronistic notion of physical
presence in economic terms is quite another.

                                III
       The illogic of retaining the physical presence requirement
in these circumstances is palpable.  Under the majority's
analysis, and our decision in National Geographic, an out-
of-state seller with one salesperson in a State would be
subject to use tax collection burdens on its entire mail order
sales even if those sales were unrelated to the salesperson's
solicitation efforts.  By contrast, an out-of-state seller in a
neighboring State could be the dominant business in the
putative taxing State, creating the greatest infrastructure
burdens and undercutting the State's home companies by
its comparative price advantage in selling products free of
use taxes, and yet not have to collect such taxes if it lacks
a physical presence in the taxing State.  The majority clings
to the physical presence rule not because of any logical
relation to fairness or any economic rationale related to
principles underlying the Commerce Clause, but simply out
of the supposed convenience of having a bright-line rule.  I
am less impressed by the convenience of such adherence
than the unfairness it produces.  Here, convenience should
give way.  Cf. Complete Auto, supra, at 289, n.15 (``We
believe, however, that administrative convenience . . . is
insufficient justification for abandoning the principle that
`interstate commerce may be made to pay its way''').
       Also very questionable is the rationality of perpetuating
a rule that creates an interstate tax shelter for one form of
business"mail order sellers"but no countervailing advan-
tage for its competitors.  If the Commerce Clause was
intended to put businesses on an even playing field, the
majority's rule is hardly a way to achieve that goal.  Indeed,
arguably even under the majority's explanation for its
``Commerce Clause nexus'' requirement, the unfairness of
its rule on retailers other than direct marketers should be
taken into account.  See ante, at 12 (stating that the
Commerce Clause nexus requirement addresses the
``structural concerns about the effects of state regulation on
the national economy'').  I would think that protectionist
rules favoring a $180 billion-a-year industry might come
within the scope of such ``structural concerns.''  See Brief for
State of New Jersey as Amicus Curiae 4.

                                IV
       The Court attempts to justify what it rightly acknowledg-
es is an ``artificial'' rule in several ways.  See ante, at 15.
First, it asserts that the Bellas Hess principle ``firmly
establishes the boundaries of legitimate state taxing
authority and reduces litigation concerning state taxation.''
Ibid.  It is very doubtful, however, that the Court's opinion
can achieve its aims.  Certainly our cases now demonstrate
two ``bright-line'' rules for mail order sellers to follow:
under the physical presence requirement reaffirmed here
they will not be subjected to use tax collection if they have
no physical presence in the taxing State; under the Nation-
al Geographic rule, mail order sellers will be subject to use
tax collection if they have some presence in the taxing State
even if that activity has no relation to the transaction being
taxed.  See National Geographic, 430 U. S., at 560562.
Between these narrow lines lies the issue of what consti-
tutes the requisite ``physical presence'' to justify imposition
of use tax collection responsibilities.
       Instead of confronting this question head-on, the majority
offers only a cursory analysis of whether Quill's physical
presence in North Dakota was sufficient to justify its use
tax collection burdens, despite briefing on this point by the
State.  See Brief for Respondent 4547.  North Dakota
contends that even should the Court reaffirm the Bellas
Hess rule, Quill's physical presence in North Dakota was
sufficient to justify application of its use tax collection law.
Quill concedes it owns software sent to its North Dakota
customers, but suggests that such property is insufficient to
justify a finding of nexus.  In my view, the question of
Quill's actual physical presence is sufficiently close to cast
doubt on the majority's confidence that it is propounding a
truly ``bright-line'' rule.  Reasonable minds surely can, and
will, differ over what showing is required to make out a
``physical presence'' adequate to justify imposing responsibil-
ities for use tax collection.  And given the estimated loss in
revenue to States of more than $3.2 billion this year alone,
see Brief for Respondent 9, it is a sure bet that the vagaries
of ``physical presence'' will be tested to their fullest in our
courts.
       The majority next explains that its ``bright-line'' rule
encourages ``settled expectations'' and business investment.
Ante, at 1516.  Though legal certainty promotes business
confidence, the mail order business has grown exponentially
despite the long line of our postBellas Hess precedents that
signalled the demise of the physical presence requirement.
Moreover, the Court's seeming but inadequate justification
of encouraging settled expectations in fact connotes a
substantive economic decision to favor out-of-state direct
marketers to the detriment of other retailers.  By justifying
the Bellas Hess rule in terms of ``the mail order industry's
dramatic growth over the last quarter-century,'' ante, at 16,
the Court is effectively imposing its own economic prefer-
ences in deciding this case.  The Court's invitation to
Congress to legislate in this area signals that its preferenc-
es are not immutable, but its approach is different from
past instances in which we have deferred to state legisla-
tures when they enacted tax obligations on the State's
share of interstate commerce.  See, e.g., Goldberg v. Sweet,
488 U. S. 252 (1989); Commonwealth Edison Co. v. Mon-
tana, 453 U. S. 609 (1981).
       Finally, the Court accords far greater weight to stare
decisis than was given to that principle in Complete Auto
itself.  As that case demonstrates, we have not been averse
to overruling our precedents under the Commerce Clause
when they have become anachronistic in light of later
decisions.  See Complete Auto, 430 U.S., at 288289.  One
typically invoked rationale for stare decisis"an unwilling-
ness to upset settled expectations"is particularly weak in
this case.  It is unreasonable for companies such as Quill to
invoke a ``settled expectation'' in conducting affairs without
being taxed.  Neither Quill nor any of its amici point to any
investment decisions or reliance interests that suggest any
unfairness in overturning Bellas Hess.  And the costs of
compliance with the rule, in light of today's modern
computer and software technology, appear to be nominal.
See Brief for Respondents 40; Brief for State of New Jersey
as Amicus Curiae 18.  To the extent Quill developed any
reliance on the old rule, I would submit that its reliance
was unreasonable because of its failure to comply with the
law as enacted by the North Dakota state legislature.
Instead of rewarding companies for ignoring the studied
judgments of duly-elected officials, we should insist that the
appropriate way to challenge a tax as unconstitutional is to
pay it (or in this case collect it and remit it or place it in
escrow) and then sue for declaratory judgment and refund.
Quill's refusal to comply with a state tax statute prior to its
being held unconstitutional hardly merits a determination
that its reliance interests were reasonable.
       The Court hints, but does not state directly, that a basis
for its invocation of stare decisis is a fear that overturning
Bellas Hess will lead to the imposition of retroactive
liability.  Ante, at 18, and n.10.  See James B. Beam Distill-
ing Co. v. Georgia, 501 U.S. "" (1991).  As I thought in
that case, such fears are groundless because no one can
``sensibly insist on automatic retroactivity for any and all
judicial decisions in the federal system.''  Id., at ""
(White, J., concurring in judgment).  Since we specifically
limited the question on which certiorari was granted in
order not to consider the potential retroactive effects of
overruling Bellas Hess, I believe we should leave that issue
for another day.  If indeed fears about retroactivity are
driving the Court's decision in this case, we would be better
served, in my view, to address those concerns directly
rather than permit them to infect our formulation of the
applicable substantive rule.
       Although Congress can and should address itself to this
area of law, we should not adhere to a decision, however
right it was at the time, that by reason of later cases and
economic reality can no longer be rationally justified.  The
Commerce Clause aspect of Bellas Hess, along with its due
process holding, should be overruled.


