Earlier this week, the Supreme Court issued an opinion on a Colorado Internet sales tax reporting law that could ultimately have an effect on internet-enabled businesses. The Colorado law at issue requires sellers outside the state of Colorado - including many that use the Internet to sell - to report the value of each purchase made by a Colorado resident to Colorado’s revenue agency. While the intent of this law was to assist this Colorado agency in collecting use taxes from its residents, sellers with no physical presence in Colorado objected to the new reporting requirements.

Although the underlying dispute in this case was whether Colorado’s remote sales tax reporting law violated both the U.S. and Colorado Constitutions, this question was not addressed by the Supreme Court. Instead, the Supreme Court remanded the case back to the federal circuit court to re-examine a variety of questions brought up by this law. This case remains important to internet-enabled sellers because any final court ruling could serve as a litmus test for other state legislatures that are looking to require out of state businesses to collect and remit sales taxes on purchases made by their residents.

While we don't expect this issue to be resolved quickly, we will continue to follow this case and provide you with updates. Read more about eBay Inc.’s position on the Internet sales tax issue.