Arizona Court of Appeals Finds RockAuto Subject to Transaction Privilege Tax on In-State Sales

The Arizona Court of Appeals vacated the tax court’s ruling and held that RockAuto, an online auto parts retailer based in Wisconsin, had a substantial nexus with Arizona and was subject to Arizona transaction privilege tax on its sales to Arizona customers from 2013 to 2019. The court found that RockAuto’s use of Arizona-based distributors to store inventory, fulfill customer orders, and make deliveries in Arizona established a physical presence and substantial nexus for RockAuto even though RockAuto had no offices or employees located in the state. The court remanded to the tax court to enter summary judgment for the ...