Background information: You are the Tax Manager of Tech Corp.

Tech Corp files returns in its home state (Connecticut) and Illinois (where the company maintains a distribution center and a sales office). Tech Corp sells high tech printers.

Tech Corps revenue = $1B;

interest income from federal bonds = $ 50,000;

interest income from state/local bonds = $200,000;

and its federal taxable income (line 28 and line 30) = $100,000,000.

You received Notice of Corporate Income Tax Due from State Y for $10M covering the last five years.

TECH CORP has only minor contacts with State Y. While you have to check into it further, it appears that TECH CORP only communicates with clients in State Y via its traditional catalog that it sends to customers (and prospects) via the U.S. mail. Orders are sent to customers out of Connecticut or Illinois via United States Postal Service (USPS).

Question: It also occurs to you that TECH CORP may have to charge sales tax on its sales to customers in State Y. For vendors obligated to sales tax it is fairly often said that said taxes are trust taxes. What does this mean?