Colorado 'Amazon law' decision criticized
Letter to the Editor

Colorado 'Amazon Law' Decision Criticized

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To the Editor:

In a letter last year, Ryan Lirette and I discussed the constitutionality of Colorado's "Amazon" law, which mandates information reporting by some out-of-state retailers who sell to Colorado residents without collecting use tax.1 Specifically, the statute requires retailers with $100,000 or more in annual sales in Colorado to notify customers of the latter's duty to report and pay use tax, to provide an annual purchase summary to customers with more than $500 in purchases, and to report customers' names, addresses, and purchase amounts to the Colorado Department of Revenue. Lirette and I concluded that Colorado's basic approach was consistent with the dormant commerce clause of the U.S. Constitution.

Judge Robert E. Blackburn of the U.S. District Court for the District of Colorado recently reached a different conclusion in Direct Marketing Association v. Huber. On January 26 he granted plaintiff's request for a preliminary injunction against enforcement of the statute, after concluding that the plaintiff had shown the requisite "substantial likelihood" of prevailing on its claim that the statute violates the dormant commerce clause.2 The injunction protects those sellers whose only contact with Colorado is by common carrier or U.S. mail.

Judge Blackburn concluded that the Amazon law discriminated against interstate commerce and imposed an undue burden on it. Rather than repeat all of the points that Lirette and I made last year, I comment on a few key aspects of the decision. Notably, although Judge Blackburn ostensibly recognizes collection of use tax as a legitimate state interest, his analysis logically implies that the imposition and collection of use tax is improper.

Alan D. Viard is a resident scholar at AEI

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About the Author

 

Alan D.
Viard
  • Alan D. Viard is a resident scholar at the American Enterprise Institute (AEI), where he studies federal tax and budget policy.

    Prior to joining AEI, Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University. He has also been a visiting scholar at the US Department of the Treasury's Office of Tax Analysis, a senior economist at the White House's Council of Economic Advisers, and a staff economist at the Joint Committee on Taxation of the US Congress. While at AEI, Viard has also taught public finance at Georgetown University’s Public Policy Institute. Earlier in his career, Viard spent time in Japan as a visiting scholar at Osaka University’s Institute of Social and Economic Research.

    A prolific writer, Viard is a frequent contributor to AEI’s “On the Margin” column in Tax Notes and was nominated for Tax Notes’s 2009 Tax Person of the Year. He has also testified before Congress, and his work has been featured in a wide range of publications, including Room for Debate in The New York Times, TheAtlantic.com, Bloomberg, NPR’s Planet Money, and The Hill. Viard is the coauthor of “Progressive Consumption Taxation: The X Tax Revisited” (2012) and “The Real Tax Burden: Beyond Dollars and Cents” (2011), and the editor of “Tax Policy Lessons from the 2000s” (2009).

    Viard received his Ph.D. in economics from Harvard University and a B.A. in economics from Yale University. He also completed the first year of the J.D. program at the University of Chicago Law School, where he qualified for law review and was awarded the Joseph Henry Beale prize for legal research and writing.
  • Phone: 202-419-5202
    Email: aviard@aei.org
  • Assistant Info

    Name: Regan Kuchan
    Phone: 202-862-5903
    Email: regan.kuchan@aei.org

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