Arizona Judges Hit Car-Parts Seller Hard on Tax Nexus Arguments

Online auto parts retailer RockAuto LLC faced a tough crowd at oral arguments before an Arizona appeals court Wednesday in its suit over whether sales into the state drew transaction privilege taxes.

The case involves a $8.5 million tax bill for 2013-2019, when the state was required to show a company selling into Arizona had a physical presence there to impose TPT on the transactions. The physical presence test changed after the US Supreme Court’s 2018 South Dakota v. Wayfair ruling allowed states to impose tax collection obligations on remote sellers based on economic activity in a state.

Madison, Wis.-based ...