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US Supreme Court holds challenge to Colorado’s sales and use tax notice and reporting requirements not barred by Tax Injunction Act

On March 3, the U.S. Supreme Court unanimously held that the Tax Injunction Act (TIA) did not bar a challenge in federal court of Colorado’s sales and use tax notice and reporting requirements for out-of-state (remote) retailers. The U.S. Supreme Court reversed and remanded a decision by the Tenth Circuit of the U.S. Court of Appeals that had held that the TIA deprived the U.S. District Court of jurisdiction to enjoin Colorado’s notice and reporting requirements. Previously, the District Court had determined that Colorado’s notice and reporting requirements violated the Commerce Clause of the U.S. Constitution. In remanding the case, the Supreme Court did not consider the underlying merits of the challenges to Colorado’s notice and reporting requirements, which will need to be addressed by the federal courts.

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