You are a legislator in the state of Northeast Columbia. (Northeast Columbia is a made-up state in the United States.) You are looking for a source of revenue for the state without increasing taxes. You realize that more and more of your citizens are doing business on the Internet and that many retailers do not collect or remit sales taxes. When the seller fails to collect sales tax, the consumer is supposed to pay the use tax directly to the state. Few people do. (In fact, you doubt that anyone is aware of this law.) The failure to pay taxes costs your state millions of dollars.

You look to the tax law, which only requires businesses to collect sales taxes if they have a "physical presence in the state." You are able to get a law passed requiring all out-of-state businesses to collect and remit sales taxes, even if the business has no physical presence in the state. You expect this law to result in millions of new tax dollars.

Instead, your state is sued by several out of state retailers who argue that the law is unconstitutional. The retailers rely on a 1967 case from the Supreme Court of the United States. In that case, the Court ruled, "Unless the retailer maintained a physical presence such as 'retail outlets, solicitors, or property within a State,' the State lacked the power to require that retailer to collect a local use tax."

The case involving your state makes its way to the Supreme Court.

Using IRAC, how should the Supreme Court of the United States rule in this case?

Issue: (What is the legal question raised by this scenario?)

Rule: (What is the legal principle that applies to the issue? - definition of a legal term, are there elements that need to be addressed?)

Application: (How does that rule apply to the fact scenario?)

Conclusion: (How should the court rule?)