E-Sales Tax Law Doesn’t Discriminate:Colorado to High Court

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By Tripp Baltz

Oct. 24 — Colorado’s electronic commerce notice and reporting law doesn’t discriminate against interstate commerce, and Direct Marketing Association’s assault on the law should be turned back, the state said in briefs filed with the Supreme Court Direct Mktg. Ass’n v. Brohl , U.S., No. 16-267, brief in opposition filed 10/24/16 .

Should the court grant DMA’s petition for review, however, then it should reframe DMA’s argument into a single question, Colorado said in its brief in opposition filed Oct. 24: By enacting a law to enforce the existing and constitutional use tax within the limitations of the Supreme Court’s foundation standard for when states may impose sales and use tax on out-of-state retailers, does a state run afoul of the anti-discrimination principles of the dormant commerce clause?

Colorado’s brief is an answer to DMA’s petition for certiorari filed Aug. 29. DMA is seeking review of a February decision by the U.S. Court of Appeals for the Tenth Circuit that Colorado’s law doesn’t discriminate against or unduly burden interstate commerce.

Notification Obligation

The law, approved by the Colorado General Assembly in 2010, requires out-of-state retailers that don’t remit the state’s sales tax to notify consumers of their obligation to do so and to report to the state Department of Revenue information about consumer purchases. Lawmakers said the intent of the law was to spur out-of-state vendors to begin collecting Colorado’s sales tax.

On Oct. 4, Colorado asked the Supreme Court whether the physical presence standard in Quill Corp. v. North Dakota, 504 U.S. 298 (1992) should be overturned in light of “the explosion of e-commerce to a multi-trillion dollar industry.” That standard has caused “startling revenue shortfall in many States,” Colorado argued in a conditional cross petition for certiorari.

In its Oct. 24 brief the state said DMA’s petition for certiorari seeks “mere error correction in a well-settled area of law and identifies no circuit split or other disagreement among the lower courts.”

To contact the reporter on this story: Tripp Baltz in Denver at abaltz@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

Text of the brief is at http://src.bna.com/jAL.

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