Ooma, Inc. v. Oregon Department of Revenue

In its landmark decision of South Dakota v. Wayfair, Inc., this Court held that a nonresident taxpayer has substantial nexus with the taxing State for Commerce Clause purposes only if the taxpayer “avails itself of the substantial privilege of carrying on business” in the taxing State. The “availment” inquiry is met, the Court explained, through a showing of both “economic and virtual contacts.” In this case, Oregon issued an assessment to Ooma, Inc. (“Ooma”) for E911 taxes. Ooma argued to the Supreme Court of Oregon that it lacked the requisite virtual contacts with the State to support an assessment of E911 taxes. The lower court, purporting to apply the holding in Wayfair, determined that an inquiry into Ooma’s virtual contacts was unnecessary because this Court “did not articulate [virtual contacts] as a requirement” for substantial nexus. The question presented is: does the Commerce Clause prevent the imposition of Oregon’s E911 tax in this case where the lower court wholly dismissed the “virtual contacts” inquiry as irrelevant to the determination of substantial nexus?