US Appeals Court Upholds Colorado Online Tax Reporting Law

A federal appeals court has upheld a Colorado law requiring out-of-state Internet retailers to tell customers how much they owe in state sales taxes.

The Denver Post reported Tuesday the 10th U.S. Circuit Court of Appeals ruled the law doesn't discriminate against interstate commerce, as online retailers claimed.

The Direct Marketing Association, which challenged the statute, says it hasn't decided whether to appeal to the Supreme Court.

The ruling could re-ignite the debate over whether states can tax online sales. A 1992 Supreme Court decision bans states from forcing out-of-state retailers to collect taxes if they don't have a physical presence in the state.

Colorado's law doesn't require Internet retailers to collect taxes but says retailers must tell customers if they owe state taxes and report purchases to state government.