Supreme Court says federal courts can rule in Colorado Internet tax dispute

IndustriesAssociated Press

A unanimous Supreme Court says federal courts have the authority to rule in a dispute over Colorado's Internet tax law.

The ruling Tuesday is a win for business groups that want to challenge the state's so-called "Amazon tax" that requires extensive reporting by retailers that don't collect the state's 2.9 percent sales tax from Colorado customers.

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Online retailers challenged the law, claiming it violates protections for companies doing business in other states. A federal court agreed that the law violates the Commerce Clause of the U.S. Constitution.

But a federal appeals court ruled that tax cases can only be filed in state court.

The high court reversed, finding that retailers were not challenging the actual collection of taxes, only a law giving state officials information about people who owe taxes.