New York Court of Appeals Rules against Vermont Vendor on Use Tax
Zheutlin, Alan, The CPA Journal
The New York Court of Appeals recently held that a Vermont vendor was required to collect New York use tax on its taxable retail sales to New York customers because it has sufficient physical presence in New York (In the Matter Orvis Company, Inc., N.Y. Ct. of Appeals, Nos. 138 and 139, June 14, 1995).
Orvis Company, Inc. (Orvis) is located in Vermont and sells both retail and wholesale camping, fishing, and hunting equipment; casual and outdoor clothing; food; and various gift items. During the period under review, its retail sales were almost entirely through mail-order catalog purchases shipped from Vermont by common carrier or the U.S. Postal Service. In addition, Orvis also sold merchandise at wholesale to New York retail establishments. The New York Appellate Division (the Appellate Division) had ruled that Orvis need not collect use tax on their taxable retail sales to New York customers because Orvis lacked a substantial physical presence in New York.
The New York Court of Appeals (the Appeals Court) did not agree with the Appellate Division. Although Orvis did not 1) maintain, lease, or own any office, distribution house or any place of business in New York; 2) own any tangible property, real or personal, in New York; 3) have a telephone listing in a New York directory; 4) have New York resident agents or rep resentatives; or, (5) approve orders in the state, the Appeals Court ruled that visits by the Orvis sales personnel to their New York retail store clients was sufficient presence to require collection of New York use taxes. Sales personnel for Orvis visited approximately 19 retail store clients (wholesale customers) an average of four times a year during the three-year audit period from 9/1/77 to 8/31/80. …