New York—A U.S. District Court judge in Colorado has issued an injunction
against the state's director of the department of revenue, blocking any enforcement of Colorado's law that requires out-of-state e-commerce businesses to report residents' purchases to the state so that it can collect sales tax.
The request for summary judgment and injunction was brought by the Direct Marketing Association, which said the law unfairly burdened out-of-state e-commerce companies. Its effect, however, would have been to dry up the affiliate businesses of Colorado Internet resellers, DMA argued.
Similar battles are occurring in other states as well, generally requiring e-commerce companies to collect sales tax themselves and remit it to the states. DMA said it expected Colorado to appeal the decision.