The 1992 Supreme Court decision in Quill Corp. v. North Dakota, 504U.S. 298 (1992), established that states could not collect sales taxes from out-of-state vendors if the vendors did not have a physical presence in the state, unless the United States Congress passed legislation giving them that right. This decision had allowed electronic business, including e-Commerce over the Internet, to grow greatly[citation needed], but had hurt states financially due to their inability to legally require out-of-state vendors to collect and remit sales taxes, and states struggled to get people to honestly report untaxed purchases on personal tax returns.
In 2010, the state of Colorado passed a law that required out-of-state vendors to collect and provide information to its citizens regarding their total purchases, so that the residents could determine their tax liability for the state. The Direct Marketing Association (DMA, and now known as the Data & Marketing Association) filed a lawsuit in the federal Colorado District Court, Direct Marketing Ass'n v. Brohl, challenging the law. The District Court ruled in favor of the DMA, based on the principle of Quill. The state appealed to Tenth Circuit Appeals Court, which ruled that under the Tax Injunction Act, the case could not be heard at the federal level. The Appeals Court argued that the act of collecting the information on taxes is not the same as tax collection, so Quill did not apply, and the Tax Injunction Act set that legal challenges to such state laws should be heard in state courts.[2]
Supreme Courtedit
The DMA took a separate challenge to the Colorado state court via Direct Marketing Ass'n v. Brohl II, but simultaneously filed an appeal with the Supreme Court to challenge the Appeals Court ruling. By March 2015, in a unanimous decision, Associate JusticeClarence Thomas held that "the relief sought by petitioner [Direct Marketing Association] would not 'enjoin, suspend or restrain the assessment, levy or collection' of Colorado's sales and use taxes."[3] The case was remanded to the Appeals Court.[2]
Post-decisionedit
The Appeals Court reviewed the case following the Supreme Court's decision, but still found in favor of the state. In their opinion, the Appeals Court stated that the state law "does not violate the dormant Commerce Clause because it does not discriminate against or unduly burden interstate commerce", and remanded the case to the District Court.[4]
The DMA tried to appeal this decision back to the Supreme Court, but the Court refused to hear the case in December 2016. By February 2017, the DMA and the state of Colorado had reached a settlement, with the DMA agreeing to drop the state and federal lawsuits in exchange for the state ignoring the penalty fees during the intervening years for non-compliance of the reporting requirements.[5]
Impactedit
A core facet of the Supreme Court's decision in Direct Marketing Ass'n came from Justice Anthony Kennedy's concurrence. Kennedy specifically wrote about Quill's "tenuous nature", and the "serious, continuing injustice faced by Colorado and many other States" of being able to only collect sales taxes from brick-and-mortar stores, and offered "it is unwise to delay any longer a reconsideration of the Court's holding in Quill".[6] Kennedy's concurrence was taken by many analysts and states that Kennedy was inviting a case to force the Supreme Court to review Quill.[2] This led to at least twenty states to develop so-called "kill Quill" legislation, forcing out-of-state vendors to collect state sales tax, as to provide a legal vehicle to bring to the Supreme Court for a formal review of Quill. South Dakota was the first state to have passed its laws, filed lawsuits against out-of-state vendors, and progressed their case through the state courts to appeal to the Supreme Court for this purpose. On June 21, 2018, Quill was overruled by South Dakota v. Wayfair, Inc..
^Baltz, Tripp (February 24, 2017). "Fight Settled Over Colorado Online Tax Reporting Law". Bloomberg Businessweek. Retrieved January 15, 2018.
^Fisher, Daniel (March 3, 2015). "Online Merchants Can Challenge Colorado Tax Law, Supreme Court Says". Forbes. Retrieved January 12, 2018.
External linksedit
Text of Direct Marketing Ass'n v. Brohl, 575U.S. ___ (2015) is available from:Google ScholarJustiaOyez (oral argument audio)
SCOTUSblog coverage
May 11, 2024
direct, marketing, brohl, direct, marketing, association, brohl, 2015, united, states, supreme, court, case, which, court, held, that, lawsuit, direct, marketing, association, trade, group, about, colorado, regarding, reporting, state, requirements, customers,. Direct Marketing Association v Brohl 575 U S 1 2015 was a United States Supreme Court case in which the Court held that a lawsuit by the Direct Marketing Association trade group about a Colorado law regarding reporting the state s tax requirements to customers and to the Colorado Department of Revenue is not barred by the Tax Injunction Act 1 While the case was reheard and found in favor of Colorado the concurrence of Justice Anthony Kennedy provided a means for states to bring a challenge the ruling of Quill Corp v North Dakota which has prevented states from collecting taxes from out of state vendors Direct Marketing Association v BrohlSupreme Court of the United StatesArgued December 8 2014Decided March 3 2015Full case nameDirect Marketing Association Petitioner v Barbara Brohl Executive Director Colorado Department of RevenueDocket no 13 1032Citations575 U S 1 more 135 S Ct 1124 191 L Ed 2d 97Case historyPriorDirect Marketing Ass n v Huber No 1 10 cv 01546 2012 WL 1079175 D Colo Mar 30 2012 remanded sub nom Direct Marketing Ass n v Brohl 735 F 3d 904 10th Cir 2013 cert granted 134 S Ct 2901 2014 SubsequentOn remand 814 F 3d 1129 10th Cir 2016 cert denied 137 S Ct 591 2016 Court membershipChief Justice John Roberts Associate Justices Antonin Scalia Anthony KennedyClarence Thomas Ruth Bader GinsburgStephen Breyer Samuel AlitoSonia Sotomayor Elena KaganCase opinionsMajorityThomas joined by unanimousConcurrenceKennedyConcurrenceGinsburg joined by Breyer Sotomayor in part Laws appliedTax Injunction Act Dormant Commerce Clause Contents 1 Background 2 Supreme Court 3 Post decision 4 Impact 5 See also 6 References 7 External linksBackground editThe 1992 Supreme Court decision in Quill Corp v North Dakota 504 U S 298 1992 established that states could not collect sales taxes from out of state vendors if the vendors did not have a physical presence in the state unless the United States Congress passed legislation giving them that right This decision had allowed electronic business including e Commerce over the Internet to grow greatly citation needed but had hurt states financially due to their inability to legally require out of state vendors to collect and remit sales taxes and states struggled to get people to honestly report untaxed purchases on personal tax returns In 2010 the state of Colorado passed a law that required out of state vendors to collect and provide information to its citizens regarding their total purchases so that the residents could determine their tax liability for the state The Direct Marketing Association DMA and now known as the Data amp Marketing Association filed a lawsuit in the federal Colorado District Court Direct Marketing Ass n v Brohl challenging the law The District Court ruled in favor of the DMA based on the principle of Quill The state appealed to Tenth Circuit Appeals Court which ruled that under the Tax Injunction Act the case could not be heard at the federal level The Appeals Court argued that the act of collecting the information on taxes is not the same as tax collection so Quill did not apply and the Tax Injunction Act set that legal challenges to such state laws should be heard in state courts 2 Supreme Court editThe DMA took a separate challenge to the Colorado state court via Direct Marketing Ass n v Brohl II but simultaneously filed an appeal with the Supreme Court to challenge the Appeals Court ruling By March 2015 in a unanimous decision Associate Justice Clarence Thomas held that the relief sought by petitioner Direct Marketing Association would not enjoin suspend or restrain the assessment levy or collection of Colorado s sales and use taxes 3 The case was remanded to the Appeals Court 2 Post decision editThe Appeals Court reviewed the case following the Supreme Court s decision but still found in favor of the state In their opinion the Appeals Court stated that the state law does not violate the dormant Commerce Clause because it does not discriminate against or unduly burden interstate commerce and remanded the case to the District Court 4 The DMA tried to appeal this decision back to the Supreme Court but the Court refused to hear the case in December 2016 By February 2017 the DMA and the state of Colorado had reached a settlement with the DMA agreeing to drop the state and federal lawsuits in exchange for the state ignoring the penalty fees during the intervening years for non compliance of the reporting requirements 5 Impact editA core facet of the Supreme Court s decision in Direct Marketing Ass n came from Justice Anthony Kennedy s concurrence Kennedy specifically wrote about Quill s tenuous nature and the serious continuing injustice faced by Colorado and many other States of being able to only collect sales taxes from brick and mortar stores and offered it is unwise to delay any longer a reconsideration of the Court s holding in Quill 6 Kennedy s concurrence was taken by many analysts and states that Kennedy was inviting a case to force the Supreme Court to review Quill 2 This led to at least twenty states to develop so called kill Quill legislation forcing out of state vendors to collect state sales tax as to provide a legal vehicle to bring to the Supreme Court for a formal review of Quill South Dakota was the first state to have passed its laws filed lawsuits against out of state vendors and progressed their case through the state courts to appeal to the Supreme Court for this purpose On June 21 2018 Quill was overruled by South Dakota v Wayfair Inc See also edit nbsp Law portal List of United States Supreme Court cases List of United States Supreme Court cases volume 575 Miller Bros Co v Maryland 1954 National Bellas Hess v Illinois 1967 South Dakota v Wayfair Inc 2018 References edit Direct Marketing Association v Brohl a b c Liptak Adam March 5 2015 Upholding Internet Sales Tax Law a Justice Invites a New Case The New York Times Retrieved January 15 2018 Direct Marketing Association v Brohl 575 U S 13 1032 3 March 2015 Direct Marketing Ass n v Brohl 814 F 3d 1129 10th Cir 2016 Baltz Tripp February 24 2017 Fight Settled Over Colorado Online Tax Reporting Law Bloomberg Businessweek Retrieved January 15 2018 Fisher Daniel March 3 2015 Online Merchants Can Challenge Colorado Tax Law Supreme Court Says Forbes Retrieved January 12 2018 External links editText of Direct Marketing Ass n v Brohl 575 U S 2015 is available from Google Scholar Justia Oyez oral argument audio Supreme Court slip opinion archived SCOTUSblog coverage Retrieved from https en wikipedia org w index php title Direct Marketing Ass 27n v Brohl amp oldid 1202066245, wikipedia, wiki, book, books, library,
