If you know anything about the State and Local Legal Center (SLLC) you know that it files amicus briefs in U.S. Supreme Court cases affecting state and local government. The SLLC made an exception and filed an amicus brief in a federal circuit court of appeals case because of the importance of the issue to SLLC members.

In Direct Marketing Association v. Brohl the Tenth Circuit will decide whether Colorado’s law requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue is unconstitutional. At least three other states have similar notice and reporting requirements (Oklahoma, South Dakota, and Vermont).   

In Quill Corp. v. North Dakota, decided in 1992, the Supreme Court held that states cannot require retailers with no in-state physical presence to collect use tax.  To improve tax collection, in 2010 the Colorado legislature began requiring remote sellers to inform Colorado purchasers annually of their purchases and send the same information to the Colorado Department of Revenue. The Direct Marketing Association sued Colorado in federal court claiming that the notice and reporting requirements are unconstitutional under Quill. 

In March the Supreme Court held unanimously that the Tax Injunction Act does not bar a federal court from deciding this case. The SLLC filed an amicus brief discusses the devastating impact Quill has had on state and local governments in light of the rise of internet purchases, Congress’s failure to pass the Marketplace Fairness Act, and states’ need to improve use tax collection through statutes like Colorado’s. 

Justice Kennedy wrote a concurring opinion in Direct Marketing Association v. Brohl, which appears to rely on the SLLC’s brief, stating that the “legal system should find an appropriate case for this Court to reexamine Quill.”

The SLLC makes the same policy arguments in the Tenth Circuit that it made in the Supreme Court. The brief also argues that the district court incorrectly concluded that Quill applies to and invalidates Colorado’s law and that the notice and reporting requirements are discriminatory. Quill only applies to sales tax collection and should not be extended to apply to notice and reporting requirements when Quill’s vitality is in serious question. It also argues that the notice and reporting requirements applicable to out-of-state vendors are not discriminatory when compared to sales tax assessment, collection, remittance, and record-keeping burdens placed upon in-state vendors.    

All of the “Big Seven” members of the SLLC joined the SLLC’s amicus brief as did associate members the International Municipal Lawyers Association and the Government Finances Officers Association. Ron Parsons, Johnson, Heidepriem & Bolleg & Parsons in Sioux Falls, South Dakota, and Lisa Soronen, SLLC, wrote the SLLC’s brief.