After Dec. 8, Will SCOTUS Force E-commerce Sites to Collect State Sales Tax?
Right now, e-commerce marketers have to keep track of laws in 50 states and collect taxes—or not—accordingly. After Dec. 8, all that could change.
The Direct Marketing Association (DMA) says it's headed to court—the highest court in the land, to be precise—on that date in order to fight Colorado's law requiring "out-of-state merchants to turn over confidential purchase history information on their Colorado customers."
Colorado's law is aimed at collecting its 2.9 percent sales tax from its residents on purchases they make from out-of-state e-commerce marketers. Specifically, according to Reuters, the rule states that marketers must inform customers from Colorado that they're required to pay the tax.
However, the case may have wider consequences.
The lawsuit—DMA vs. Brohl, named after Barbara Brohl, executive director of the Colorado Department of Revenue—is in select company. SCOTUS receives 10,000 petitions a year and only hears oral arguments in 75 to 80. The court often decides to hear cases based on bigger picture issues—as it did in Burwell vs. Hobby Lobby.
DMA sees the larger issue as the ability for businesses "to challenge state regulations in a neutral forum." (Please see the infographic in the media player at right.)
The oral arguments are happening about a month after Roll Call reports that the Marketplace Fairness Act is dead. "Boehner Kills Internet Sales Tax Bill" says on Nov. 10 that the House will not vote on the bill this year.
Attorney Diana Fitzpatrick, who provides e-commerce marketers with links to all state laws regarding Internet taxation on Nolo.com, says a federal decision would supersede what many call "Amazon laws" enacted at the state level.
Will marketers be paying attention to the SCOTUS arguments?
Please respond in the comments section below.