Business, Tax Groups Weigh in on Supreme Court Case DMA v. Brohl

WASHINGTON, DC – Following last week’s opening brief from the Direct Marketing Association (DMA), numerous organizations today filed amicus (“Friend of the Court”) briefs on the U.S. Supreme Court case DMA v. Brohl. The case stems from a challenge of a Colorado notice and reporting law requiring out-of-state merchants to disclose confidential purchase history information about their Colorado customers to the state’s revenue department. The nation’s highest court will consider the question of whether federal courts may hear constitutional challenges to state regulations that only indirectly relate to state tax laws during its upcoming term.

Groups supporting DMA’s position in the case include the U.S. Chamber of Commerce, Council on State Taxation, Institute for Professionals in Taxation, and National Federation of Independent Business (NFIB).

“The outcome of this case will directly impact consumer privacy and the ability of businesses of all sizes to challenge state laws that violate consumer privacy,” said Peggy Hudson, DMA SVP of Government Affairs. “DMA is fighting to ensure that state statutes and regulations that violate the privacy of customers, like the Colorado law from which this case stems, can be challenged in a neutral forum and that the private relationship between a customer and a retailer is preserved.

“We are grateful to all of those who have filed briefs supporting our position and companies standing with the DMA to defend the $156 billion data-driven marketing economy,” she added.

“How far the federal Tax Injunction Act can reach to impede businesses from having their cases heard in a federal court is important to the COST membership,” said Fred Nicely, Senior Tax Counsel for the Council On State Taxation. “Cases asserting a state’s police authority rather than addressing a specific state tax should not be subject to the federal Tax Injunction Act. Subjecting out-of-state businesses to burdensome reporting and notice requirements encumbers interstate commerce and should be addressed by federal courts.”

“The Tenth Circuit’s ruling in DMA v. Brohl would have a profound impact on the ability to challenge state laws in federal court—even laws that have little or nothing to do with taxation,” said Cass Vickers, Executive Director of the Institute for Professionals in Taxation. “With over 4,500 memberships across the U.S. and Canada, many of the companies that are represented by IPT’s members would be affected by that ruling.  The DMA suit asserts that the Colorado law at issue places unconstitutionally burdensome notice and reporting requirements on remote businesses that make sales to Colorado residents.  The suit does not contest either the validity of any Colorado tax or anyone’s liability for Colorado tax, and the requirements imposed by the subject law are only secondary to the state’s tax administration.  IPT therefore believes it is critical for the Supreme Court to make it clear that cases of this nature can be brought in the federal courts and are not barred by the Tax Injunction Act.”

“Small businesses already have to deal with reporting requirements from the federal, state and local levels,” said Karen Harned, Executive Director of the NFIB’s Small Business Legal Center. “Most small employers do not have an in-house accounting department which means that instead of focusing on running their business, employers are forced to divert their time and resources on figuring out bureaucracy- rather than growing their businesses – and creating jobs. Adding yet another reporting requirement on small business will just impose more unnecessary burdens on them. We urge the Supreme Court to stand up for small businesses in this case.”

The State of Colorado is required to file its brief on October 17, with a reply brief from DMA due in mid-November. Oral arguments are scheduled for Monday, December 8, 2014.

DMA v. Brohl is U.S. Supreme Court Docket No. 13-1032.

About Direct Marketing Association (DMA)

The Direct Marketing Association (www.thedma.org) is the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing.  Founded in 1917, DMA represents thousands of companies and nonprofit organizations that use and support data-driven marketing practices and techniques. DMA provides the Voice to shape policy and public opinion, the Connections to grow members’ businesses and the Tools to ensure full compliance with ethical and best practices as well as professional development.

In 2012, the Data-Driven Marketing Economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs.  The real value of data is in its exchange across the DDME:  70 percent of the value of the DDME – $110 billion in revenue and 478,000 jobs – depends on the ability of firms to exchange data across the DDME.

# # #

Share Now: Tweet about this on TwitterShare on LinkedInShare on Facebook