Scholastic Book Clubs v Dep't of Treasury, 223 Mich App2d 576 (1997).
Use tax collection; nexus
Teachers who collect book orders from their students were not agents for an out-of-state book company and did not create nexus for the book company. Scholastic Book Clubs sells books by mailing catalogs to teachers. Teachers then distribute catalogs to students, collect orders and money, remit orders to the book company, and then distribute books to students. Teachers received bonus point based on orders submitted redeemable for additional books or classroom materials. The Department asserted that the teachers acted as sales representatives of book company thereby creating nexus for use tax collection. Scholastic argued that it did not have a substantial continuing presence to create nexus. The Court of Appeals relied on Pledger v Troll Book Clubs, Inc, 316 Ark 195; 871 SW2d 389 (1994), and held that the teachers were not the agents of the book company. Accordingly, the Court found nexus was not created.