‘Amazon Tax’ Case Illustrates Fed v. State Jurisdictions

While the U.S. Supreme Court decision on Colorado’s “Amazon tax” law focused on decades-old decisions on how much federal regulation can reach into state taxation, it also tackled the idea of federal courts being “more fair” to out-of-state interests facing local courts. The Denver Post coverage began its story by saying the high court “… stripped Colorado Attorney General Cynthia Coffman of home field advantage” in the case, which concerns the Mile High state’s law requiring retailers to report purchases made by their Colorado customers for tax purposes – if they do not collect the state tax, Colorado says they have to pay it themselves.


An appeals court had barred the legal challenge to the 2010 law. This week’s decision means it can go ahead. The Direct Marketing Association, the plaintiff, made the case for federal jurisdiction, saying in a satement that it “… believes national businesses having access to a neutral, federal forum is a critical aspect of our judicial system.” The Post story also noted the case had venue implications: “Carolyn Tyler, a spokeswoman for {state AG] Coffman, said the U.S. Supreme Court didn’t address the merits of the underlying case and that the core legal arguments can now move forward. “They issued a procedural ruling on a technical question regarding jurisdiction and found that this case could proceed in the 10th Circuit,” Tyler said.

National retailers are not the only ones looking at the federal courts as better venues for their cases, and it will be interesting to see if the tax case has wider lawsuit implications. Read the Post’s well-reported story here: Supreme Court kicks Colorado online tax case to federal court