In 2010 Colorado passed a law requiring internet retailers, whose gross sales exceeded $100,000, to mail annual use tax owed notices to customers that bought over $500 worth of merchandise.
Last year a lower court threw the statute out, claiming that it placed an “undue burden on interstate commerce.”
Yesterday the U.S. Court of Appeals for the 10th Circuit remanded the case back to the lower court, claiming that it had overstepped its authority, and that it had to lift the permanent injunction on the tax. The reason cited was the U.S. Tax Injunction Act, which prevents federal courts from taking on state tax disputes when a state court could handle the matter. It also prohibits Federal lawsuits that could restrain the collection of state taxes.
The suit was brought by the Direct Marketing Association (DMA); a trade association based out of New York.
If the lower court reverses the injunction, then the Amazon act will be back in effect; however the DMA could still try to get an injunction in state court.