A federal judge has ruled that Colorado ran afoul of the US Constitution when it passed legislation forcing out-of-state retailers to report their customers’ purchases to the state’s tax authority.
Two decades ago, the US Supreme Court ruled that a state cannot require mail-order retailers to collect sales tax unless the retailer has a physical presence in the state. Under the commerce clause of the US Constitution, only Congress can regulate interstate commerce, and the Supreme Court ruled that forcing retailers to collect out-of-state sales taxes would create too much of a burden on interstate commerce. The courts left the door open for Congress to establish an interstate sales tax collection system. But while Congress has discussed the possibility, no legislation has been enacted so far.
from Ars Technica