Syllabus

(a) Bellas Hess was not rendered obsolete by this Court's subsequent decision in Complete Auto, supra, which set forth the four-part test that continues to govern the validity of state taxes under the Commerce Clause. Although Complete Auto renounced an analytical approach that looked to a statute's formal language rather than its practical effect in determining a state tax statute's validity, the Bellas Hess decision did not rely on such formalism. Nor is Bellas Hess inconsistent with Complete Auto. It concerns the first part of the Complete Auto test and stands for the proposition that a vendor whose only contacts with the taxing State are by mail or common carrier lacks the "substantial nexus" required by the Commerce Clause. Pp. 309-312.

(b) Contrary to the State's argument, a mail-order house may have the "minimum contacts" with a taxing State as required by the Due Process Clause and yet lack the "substantial nexus" with the State required by the Commerce Clause. These requirements are not identical and are animated by different constitutional concerns and policies. Due process concerns the fundamental fairness of governmental activity, and the touchstone of due process nexus analysis is often identified as "notice" or "fair warning." In contrast, the Commerce Clause and its nexus requirement are informed by structural concerns about the effects of state regulation on the national economy. Pp. 312-313.

(c) The evolution of this Court's Commerce Clause jurisprudence does not indicate repudiation of the Bellas Hess rule. While cases subsequent to Bellas Hess and concerning other types of taxes have not adopted a bright-line, physical-presence requirement similar to that in Bellas Hess, see, e. g., Standard Pressed Steel Co. v. Department of Revenue of Wash., 419 U. S. 560, their reasoning does not compel rejection of the Bellas Hess rule regarding sales and use taxes. To the contrary, the continuing value of a bright-line rule in this area and the doctrine and principles of stare decisis indicate that the rule remains good law. Pp. 314-318.

(d) The underlying issue here is one that Congress may be better qualified to resolve and one that it has the ultimate power to resolve. Pp. 318-319.

470 N. W. 2d 203, reversed and remanded.

STEVENS, J., delivered the opinion for a unanimous Court with respect to Parts I, II, and III, and the opinion of the Court with respect to Part IV, in which REHNQUIST, C. J., and BLACKMUN, O'CONNOR, and SOUTER, JJ., joined. SCALIA, J., filed an opinion concurring in part and concurring in the judgment, in which KENNEDY and THOMAS, JJ., joined, post, p. 319. WHITE, J., filed an opinion concurring in part and dissenting in part, post, p. 321.

Counsel

John E. Gaggini argued the cause for petitioner. With him on the briefs were Don S. Harnack, Richard A. Hanson, James H. Peters, Nancy T. Owens, and William P. Pearce.

Nicholas J. Spaeth, Attorney General of North Dakota, argued the cause for respondent. With him on the brief were Laurie J. Loveland, Solicitor General, Robert W. Wirtz, Assistant Attorney General, and Alan H. Friedman, Special Assistant Attorney General.*

*Briefs of amici curiae urging reversal were filed for the State of New Hampshire et al. by John P. Arnold, Attorney General of New Hampshire, and Harold T. Judd, Senior Assistant Attorney General, Charles M. Oberly III, Attorney General of Delaware, and John R. McKernan, Jr., Governor of Maine; for the American Bankers Association et al. by John J. Gill III, Michael F. Crotty, and Frank M. Salinger; for the American Council for the Blind et al. by David C. Todd and Timothy J. May; for Arizona Mail Order Co., Inc., et al. by Maryann B. Gall, Timothy B. Dyk, Michael J. Meehan, Frank G. Julian, David J. Bradford, George S. Isaacson, Martin I. Eisenstein, and Stuart A. Smith; for Carrot Top Industries, Inc., et al. by Charles A. Trost and James F. Blumstein; for the Clarendon Foundation by Ronald D. Maines; for the Coalition for Small Direct Marketers by Richard J. Leighton and Dan M. Peterson; for the Direct Marketing Association by George S. Isaacson, Martin I. Eisenstein, and Robert J. Levering; for the National Association of Manufacturers et al. by Bruce J. Ennis, Jr., David W. Ogden, Jan S. Amundson, and John Kamp; for Magazine Publishers of America, Inc., et al. by Eli D. Minton, James R. Cregan, Ian D. Volner, and Stephen F. Owen, Jr.; and for the Tax Executives Institute, Inc., by Timothy J. McCormally.

Briefs of amici curiae urging affirmance were filed for the State of Connecticut et al. by Richard Blumenthal, Attorney General of Connecticut, and Paul J. Hartman, Charles W. Burson, Attorney General of Tennessee, Daniel E. Lungren, Attorney General of California, Winston Bryant, Attorney General of Arkansas, Robert A. Butterworth, Attorney General of Florida, Michael J. Bowers, Attorney General of Georgia, Larry Echo Hawk, Attorney General of Idaho, Roland W. Burris, Attorney General of Illinois, Bonnie J. Campbell, Attorney General of Iowa, Frederic J. Cowan, Attorney General of Kentucky, William J. Guste, Jr., Attorney General of Louisiana, J. Joseph Curran, Jr., Attorney General of Maryland, Scott Harshbarger, Attorney General of Massachusetts, Frank J. Kelley, Attorney General of Michigan, Mike Moore, Attorney General of Mississippi, Frankie Sue Del Papa, Attorney General of Nevada, Robert

Opinion of the Court

JUSTICE STEVENS delivered the opinion of the Court.

This case, like National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967), involves a State's attempt to require an out-of-state mail-order house that has neither outlets nor sales representatives in the State to collect and pay a use tax on goods purchased for use within the State. In Bellas Hess we held that a similar Illinois statute violated the Due Process Clause of the Fourteenth Amendment and created an unconstitutional burden on interstate commerce. In particular, we ruled that a "seller whose only connection with customers in the State is by common carrier or the United States mail" lacked the requisite minimum contacts with the State. Id., at 758.

In this case, the Supreme Court of North Dakota declined to follow Bellas Hess because "the tremendous social, economic, commercial, and legal innovations" of the past quarter-century have rendered its holding "obsole[te]." 470 N. W. 2d 203, 208 (1991). Having granted certiorari, 502 U. S. 808, we must either reverse the State Supreme Court

Abrams, Attorney General of New York, Lee Fisher, Attorney General of Ohio, Susan B. Loving, Attorney General of Oklahoma, Ernest D. Preate, Jr., Attorney General of Pennsylvania, T. Travis Medlock, Attorney General of South Carolina, Dan Morales, Attorney General of Texas, Paul Van Dam, Attorney General of Utah, Jeffrey L. Amestoy, Attorney General of Vermont, Mary Sue Terry, Attorney General of Virginia, Ken Eikenberry, Attorney General of Washington, Mario J. Palumbo, Attorney General of West Virginia, and John Payton; for the State of New Jersey by Robert J. Del Tufo, Attorney General, Sarah T. Darrow, Deputy Attorney General, Joseph L. Wannotti, Assistant Attorney General, Richard G. Taranto, and Joel I. Klein; for the State of New Mexico by Tom Udall, Attorney General, and Frank D. Katz, Special Assistant Attorney General; for the City of New York by O. Peter Sherwood, Edward F. X. Hart, and Stanley Buchsbaum; for the International Council of Shopping Centers, Inc., et al. by Charles Rothfeld; for the Multistate Tax Commission by James F. Flug and Martin Lobel; for the National Governors' Association et al. by Richard Ruda; and for the Tax Policy Research Project by Rita Marie Cain.

Opinion of the Court

or overrule Bellas Hess. While we agree with much of the state court's reasoning, we take the former course.

I

Quill is a Delaware corporation with offices and warehouses in Illinois, California, and Georgia. None of its employees work or reside in North Dakota, and its ownership of tangible property in that State is either insignificant or nonexistent.1 Quill sells office equipment and supplies; it solicits business through catalogs and flyers, advertisements in national periodicals, and telephone calls. Its annual national sales exceed $200 million, of which almost $1 million are made to about 3,000 customers in North Dakota. It is the sixth largest vendor of office supplies in the State. It delivers all of its merchandise to its North Dakota customers by mail or common carrier from out-of-state locations.

As a corollary to its sales tax, North Dakota imposes a use tax upon property purchased for storage, use, or consumption within the State. North Dakota requires every "retailer maintaining a place of business in" the State to collect the tax from the consumer and remit it to the State. N. D. Cent. Code §57-40.2-07 (Supp. 1991). In 1987, North Dakota amended the statutory definition of the term "retailer" to include "every person who engages in regular or system

1In the trial court, the State argued that because Quill gave its customers an unconditional 90-day guarantee, it retained title to the merchandise during the 90-day period after delivery. The trial court held, however, that title passed to the purchaser when the merchandise was received. See App. to Pet. for Cert. A40-A41. The State Supreme Court assumed for the purposes of its decision that that ruling was correct. 470 N. W. 2d 203, 217, n. 13 (1991). The State Supreme Court also noted that Quill licensed a computer software program to some of its North Dakota customers that enabled them to check Quill's current inventories and prices and to place orders directly. Id., at 216-217. As we shall explain, Quill's interests in the licensed software does not affect our analysis of the due process issue and does not comprise the "substantial nexus" required by the Commerce Clause. See n. 8, infra.

Opinion of the Court

atic solicitation of a consumer market in th[e] state." §5740.2-01(6). State regulations in turn define "regular or systematic solicitation" to mean three or more advertisements within a 12-month period. N. D. Admin. Code § 81-04.1-0103.1 (1988). Thus, since 1987, mail-order companies that engage in such solicitation have been subject to the tax even if they maintain no property or personnel in North Dakota.

Quill has taken the position that North Dakota does not have the power to compel it to collect a use tax from its North Dakota customers. Consequently, the State, through its Tax Commissioner, filed this action to require Quill to pay taxes (as well as interest and penalties) on all such sales made after July 1, 1987. The trial court ruled in Quill's favor, finding the case indistinguishable from Bellas Hess; specifically, it found that because the State had not shown that it had spent tax revenues for the benefit of the mailorder business, there was no "nexus to allow the state to define retailer in the manner it chose." App. to Pet. for Cert. A41.

The North Dakota Supreme Court reversed, concluding that "wholesale changes" in both the economy and the law made it inappropriate to follow Bellas Hess today. 470 N. W. 2d, at 213. The principal economic change noted by the court was the remarkable growth of the mail-order business "from a relatively inconsequential market niche" in 1967 to a "goliath" with annual sales that reached "the staggering figure of $183.3 billion in 1989." Id., at 208, 209. Moreover, the court observed, advances in computer technology greatly eased the burden of compliance with a "welter of complicated obligations"" imposed by state and local taxing authorities. Id., at 215 (quoting Bellas Hess, 386 U. S., at 759-760).

Equally important, in the court's view, were the changes in the "legal landscape." With respect to the Commerce Clause, the court emphasized that Complete Auto Transit, Inc. v. Brady, 430 U. S. 274 (1977), rejected the line of cases holding that the direct taxation of interstate commerce was