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By Tripp Baltz
The Data & Marketing Association and Colorado are in talks to resolve the DMA’s suit against the state’s requirement that certain out-of-state retailers report information about consumer purchases to the state if they don’t collect and remit state sales taxes ( Direct Mktg. Ass’n v. Brohl, Colo. Dist. Ct., No. 13-CV-34855, status report 1/17/17 ).
In a Jan. 17 status report on the 2013 lawsuit filed by the organization, formerly the Direct Marketing Association, the parties said they have entered into discussions “for the possible resolution of all of the DMA’s claims.” The discussions are ongoing, and the DMA said it expects them to be complete “well in advance of” the next status report to the court in April.
The DMA is challenging Colorado’s law that requires out-of-state companies who don’t collect and remit taxes on remote sales to provide annual reports on consumer purchases and to notify consumers of their obligation to pay sales taxes. The suit, pending in the Colorado District Court in Denver County, includes claims under the commerce clause, the First Amendment, the right of privacy and the takings clause.
The case was stayed pending resolution of a similar federal lawsuit. In December, the U.S. Supreme Court denied a petition to review an earlier ruling by the U.S. Court of Appeals for the Tenth Circuit finding the law constitutional. In its latest brief, the DMA proposes the court continue the stay “pending the completion of the parties’ settlement discussions.”
In the federal case, the DMA alleged the Colorado law, approved by the state General Assembly in 2010, violated the interstate commerce clause by imposing on out-of-state sellers requirements not binding on in-state retailers. In a cross-petition to the U.S. Supreme Court, the state asked the court not to take the appeal, but if it did decide to review the case, to also consider overturning its foundational nexus standard in Quill Corp. v. North Dakota,504 U.S. 298 (1992).
That ruling bars a state from requiring a remote vendor from collecting sales taxes if the vendor doesn’t have a physical presence in the state.
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Text of the brief is at http://src.bna.com/lEk.
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