Indiana

In a matter of first impression, the Indiana Tax Court has ruled that a bank didn't need to have a physical presence in the state to be subject to Indiana's Financial Institutions Tax.

In MBNA America Bank, N.A. & Affiliates v. Indiana Department of State Revenue, No.
49T10-0506-TA-53, MBNA America Bank appealed the Department of State
Revenue's denial of its claims for a refund of the Indiana Financial
Institutions Tax (FIT) it paid during the 1992-98 tax years. MBNA
argued because its principal place of business is in Delaware and it
doesn't have a place of business here nor did any of its employees come
here on business, it wasn't subject to the FIT

The bank believed under the Commerce Clause, which prohibits states from charging taxes on an out-of-state business unless it has a "substantial nexus" with the taxing state, a company has to have a physical presence in Indiana in order to be charged the FIT. The department moved for summary judgment on the issue.

Indiana Tax Judge Thomas Fischer determined the U.S. Supreme Court holdings in National Bellas Hess v. Department of Revenue of Illinois, 386 U.S. 753 (1967), and Quill Corp. v. North Dakota, 504 U.S. 298 (1992), don't control in the instant case because the U.S. Supreme Court didn't extend the physical presence requirement beyond sales and use taxes.