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Supremes to Hear Colorado Online Tax Case

The Supreme Court has agreed to hear the Digital Marketing Association's challenge to a Tenth Circuit Court of Appeals decision that allowed Colorado to continue to impose "use" tax notice and collection requirements on online retailers who do over $100,000 worth of business in the state and don't collect state sales taxes.

A district court had enjoined Colorado from imposing the requirements, which include providing notices and purchase summaries to customers and reporting annually to the state.

DMA sued the Colorado Department of Revenue, the court granted DMA a preliminary injunction and then a permanent one, and found that, on its face, the requirements discriminated against interstate commerce.

The Tenth Circuit remanded that decision, telling the court to dismiss DMA's Commerce Clause claims and dissolve the injunction.

The Supremes have now agreed to weigh in on the case.

“We are pleased that the Supreme Court has agreed to hear this important case,” said Peggy Hudson, DMA’s senior VP of government affairs in a statement. “DMA began this fight four years ago with the goal of protecting consumer privacy by safeguarding businesses from being forced to divulge their customers’ purchase history to the State of Colorado. Along the way, the fight has broadened to encompass not only issues of privacy, but also fundamental constitutional questions about access to federal courts.”