Supreme Court allows challenge to Colorado Internet tax

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.

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.