The Securities Industry and Financial Markets Association (SIFMA) today issued the following statement after the U.S. Supreme Court decided not hear Capital One Bank v. Commissioner of Revenue, a Massachusetts Supreme Judicial Court case dealing with a state’s right to tax a company’s activities while maintaining no physical presence in the state.
“The Supreme Court’s decision not to hear this case is disappointing. SIFMA believes the state court’s decision is part of a disturbing trend by state taxing authorities and legislatures to impose taxes on out-of-state businesses based on in-state marketing activities without providing clarity or certainty as to whether and to what extent operations will create a tax liability in various states. Without a bright-line test, investment will be discouraged, litigation costs will rise, and compliance burdens for institutions will increase.”
On April 17, 2009, SIFMA filed an amicus brief for the case in support of the bank's petition for U.S. Supreme Court review of the Massachusetts state court decision. SIFMA was joined on the brief by The Clearing House as well as several international trade associations. A copy of SIFMA's amicus brief is available online at: http://www.sifma.org/regulatory/pdf/CaptitalOnevCommrofRevenue-41709.pdf.