Hastings Constitutional Law Quarterly


Molly Schneider


In Quill Corp. v. North Dakota, the Supreme Court emphasized that Congress is the proper authority to promulgate rules governing state taxation of interstate commerce. Despite this confirmation of authority, Congress has only successfully set a uniform state sales-and-use tax regime once with the Mobile Telecommunication Sourcing Act. Since the enactment of the MTSA, states have continually attempted to adapt tax regimes to new technologies, but have been severely limited by the Commerce Clause.

One area of particular focus has been cloud computing due to the industry's complicated web of locations. This note will discuss whether states need Congress to intervene or redefine current Commerce Clause limitations in order to tax the cloud and, if so, whether Congress will act. Part I will introduce the three main service models of cloud computing. Part II will describe the traditional constitutional limitations on state taxation and how these limits constrain states from taxing the cloud. Part III will discuss whether states can successfully tax the cloud on their own by analyzing the Amazon tax, where states have individually developed legislation that requires out-of-state vendors to collect sales tax. Finally, Part IV will debate whether a uniform approach from Congress is likely to occur and if it is economically achievable by comparing the conditions under which the MTSA was passed.