April 2, 2012

On Friday  DMA learned that it won its suit against the State of Colorado preventing it from imposing draconian reporting requirements on our Internet and catalog members selling to Colorado residents.  

Judge Blackburn of the U. S. District Court for the District of Colorado issued an order granting the DMA’s motion for summary judgment, issued a declaratory judgment  and a permanent injunction in the DMA’s complaint challenging the 2010 Colorado use tax notice and reporting law. 

The Colorado law imposed burdensome notice obligations on remote sellers.  “In general, the Act and Regulations require retailers that sell products to customers in Colorado, but do not collect and remit Colorado sales tax on those transactions, to report certain information about the customers’ purchases from the retailer to each customer and to the Colorado Department of Revenue.”  

The Court found that the law is unconstitutional because it  (1) discriminates against out-of-state retailers in violation of the Commerce Clause and (2) imposes an undue burden on remote sellers with no physical presence in the state, in violation of the Quill “physical presence” standard. 

The Court has entered a permanent injunction against the State of Colorado permanently prohibiting enforcement of the Act.  (DMA had previously won a preliminary injunction prohibiting enforcement of the Act in January, 2010.  That preliminary injunction has now been replaced by a permanent injunction.)  

"This is a significant victory for DMA and its members,” said Jerry Cerasale, DMA’s Senior Vice President for Government Affairs.  “DMA is the only voice fighting against these draconian reporting requirements.  Our actions in Colorado have halted efforts in other states to copy the law.  We want to thank those members who have supported our suit financially.  Without them, this victory would have been impossible.  We now are preparing to defend this victory in the U.S. Court of Appeals for the 10th Circuit as we expect Colorado to fight against this win.

Click here to view the Order  

For more information, contact: 

Jerry Cerasale

Senior Vice President, Government Affairs

Direct Marketing Association

1615 L Street, NW  Suite 1100

Washington, DC  20036

202-861-2423

www.the-dma.org