The Direct Marketing Association v Brohl

Association sued Brohl’s predecessor in his official capacity seeking a declaration that Colorado’s notice to buyers and reporting to state tax officials requirements for use tax purposes violated the dormant commerce clause. The district court enjoined enforcement of the provisions. The panel, on remand form the United States Supreme Court and with one judge concurring, reversed. The majority held the ban on requiring out of state business form collecting sales and use taxes in Supreme Court precedent is limited to tax collection and does not extend to notice or reporting requirements. It held the requirements did not discriminate against interstate commerce because the statute does not distinguish between in state and out of state businesses and contains no geographical distinction and does not discriminate in practice because the requirements do not benefit in state businesses, tax collector and tax noncollector businesses are not similarly situated and is not detrimental to the out of state businesses when viewed in the context of the entire taxation scheme. It held there was no undue burden on interstate commerce because the bright line rule in Supreme Court precedent doesn’t apply here and Association failed to identify any other ground. The concurrence argued that the Supreme Court bright line rule is an artifact of precedent, nothing in its reasoning requires the panel to strike down the requirements here and in fact the case relied upon by Association appears to invite states to impose the kinds of requirements that Colorado chose to impose here.