Direct Marketing Ass'n v. Brohl

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. 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.

Background

The 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, 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.