Supreme Court: Business can challenge Colorado tax law

The Supreme Court unanimously ruled Tuesday that a business group can challenge a Colorado tax law dealing with online purchases in federal court.

{mosads}Under Colorado’s “Amazon tax,” retailers based elsewhere that don’t collect sales taxes from Colorado residents have to give the state extensive information on those purchases.

A federal court had ruled that the challenge could only be made in state courts. But the Supreme Court disagreed, sending the case back to federal appeals court.

The case could also lead to a broader reexamination of how online purchases are taxed. Currently, states cannot tax purchases that residents make from an out-of-state retailer unless that company has a physical presence within its borders. 

Retail groups have been pushing legislation to give states more latitude to tax those purchases.