Supreme Court to Hear DMA Case Against Colorado Tax Law
Washington, DC, July 1, 2014—The Supreme Court of the United States today announced that it will hear a case brought by the Direct Marketing Association (DMA) relating to a Colorado law imposing a notice and reporting scheme on remote sellers that do not collect state sales tax. In granting a writ of certiorari in the case of Direct Marketing Association v. Brohl, the Supreme Court agreed to consider the question of whether the federal courts may decide constitutional challenges to state tax regulations affecting only out-of-state businesses.
"We are pleased that the Supreme Court has agreed to hear this important case," said Peggy Hudson, DMA's senior vice president of government affairs. "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."
In July 2010, DMA filed a lawsuit in U.S. District Court in Colorado challenging the constitutionality of a new Colorado notice and reporting law that requires out-of-state merchants to turn over to the Department of Revenue (DOR) confidential purchase history information regarding their Colorado customers. In the lawsuit, DMA contends that the Colorado law constitutes an unprecedented invasion of consumer privacy and unfairly discriminates against interstate commerce by targeting solely out-of-state merchants.
Over the past four years, both federal and state courts have agreed with DMA's position on the substantive issues presented in its lawsuit, Direct Marketing Association v. Brohl. In March 2012, DMA won summary judgment and a permanent injunction in U.S. District Court, ensuring that businesses would not have to comply with the problematic Colorado law while its constitutionality was decided.