Amazon Laws Struck Down in Colorado and Illinois
Courts in Illinois and Colorado have given the Amazon Tax movement its most significant setbacks to date. In Illinois, the Performance Marketing Association challenged an Amazon tax law much like that adopted in New York and in other states, with the court finding that the Act was enforceable since it
fails the “substantial nexus” requirement for state use tax collection and reporting obligations under the Commerce Clause . . . of the United States Constitution.
In Colorado, the state adopted an onerous reporting scheme applicable to out-of-state retailers who did not collect sales tax. The Direct Marketing Association had challenged the law and won a preliminary injunction. The court granted the DMA summary judgment finding that the law violated the Commerce Clause for two reasons:
First, the Act and the Regulations directly regulate and discriminate against out-of-state retailers and interstate commerce. . . Second, the Act and the Regulations impose an undue burden on interstate commerce.
These are the first two rulings to definitively invalidate any Amazon tax or similar state law and set a precedent for future courts considering Amazon type laws.
More Info: Cyber Law and Business Report discussion of Colorado ruling; and IL and CO rulings (below); Timeline of Amazon Tax Battle (below).
The History of the Amazon Tax Fight
SEE INTERACTIVE TIMELINE of history of Amazon Tax Fight – from New York’s enactment to Illinois’ court decision.