State officials vowed to continue their fight to force interstate mailorder companies to collect use taxes despite a major setback last week before the Supreme Court.

Ruling in Quill Corp. v. North Dakota, the Supreme Court said states cannot make interstate catalog retailers collect sales taxes unless the firms have a substantial nexus, or connection, with the taxing state. But the court said Congress has ultimate authority to deal with the issue, because the Constitution gives it power to regulate interstate commerce.

"It is incumbent on members of Congress to pass legislation this year," said Kansas Sen. Paul Burke, president of both the National Conference of State Legislatures and the Kansas Senate.

Gov. George A. Sinner of North Dakota, in a statement on behalf of the National Governors' Association, said the nation's governors also will press for legislation.

In the meantime, Gov. Sinner said state officials will continue to bring direct marketing companies to court if they believe the firms' business practices provide substantial nexus. He said the use of "800" phone numbers, drop shipments, and other practices may provide a sufficient connection between direct retailers and states to require the firms to collect the taxes.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.