Direct Marketing Association, The v. Huber
MOTION for Partial Summary Judgment Counts I and II (Commerce Clause) by Defendant Roxy Huber. (Attachments: # 1 Exhibit 1- Fox Decl. & Rep., # 2 Exhibit 2-1 IRS Tax Gap, # 3 Exhibit 2-2 IRS Tax Gap, # 4 Exhibit 2-3 IRS Tax Gap, # 5 Exhibit 2-4 IRS Tax Gap, # 6 Exhibit 2-5 IRS Tax Gap, # 7 Exhibit 2-6 IRS Tax Gap, # 8 Exhibit 2-7 IRS Tax Gap, # 9 Exhibit 2-8 IRS Tax Gap, # 10 Exhibit 3- Saliman Decl., # 11 Exhibit 4- Corjuo Decl., # 12 Exhibit 5- Gable Decl. & Rep., # 13 Exhibit 6- Barry Dep., # 14 Exhibit 7- Stevens Decl., # 15 Exhibit 8- Thompson Decl., # 16 Exhibit 9- Lichtenstein Decl. & Rep., # 17 Exhibit 10- Adler Dep.)(Snyder, Melanie)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 10-cv-01546-REB-CBS
The Direct Marketing Association,
Roxy Huber, in her capacity as Executive Director,
Colorado Department of Revenue,
DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENTCOUNTS I AND II (COMMERCE CLAUSE)
Defendant, Roxy Huber, Executive Director of the Colorado Department of
Revenue (“DOR”), moves for partial summary judgment, pursuant to Federal Rule of
Civil Procedure 56, on Counts I and II of Plaintiff, the Direct Marketing Association
(“DMA”),’s First Amended Complaint (“Am.Compl.”), filed July 23, 2010 [Dkt. #10].
INTRODUCTION AND BACKGROUND
DMA alleges that a Colorado statute, Colo. Rev. Stat. § 39-21-112(3.5) (2010),
and the implementing regulations, 1 Colo. Code Regs. § 201-1:39-21-112.3.5 (2010),
(collectively, “the Law”), violate the Commerce Clause of the United States Constitution,
Art. I, § 8, Cl. 3. First, DMA alleges that the Law discriminates against interstate
commerce and imposes notice and reporting requirements that burden out-of-state
retailers to the benefit of in-state retailers. Am.Compl., Count 1, pp.18-19. Second,
DMA alleges the Law is an improper regulation of and imposes an undue burden upon
interstate commerce because it imposes notice and reporting requirements upon
retailers with no physical presence in Colorado. Am.Compl., Count 2, pp.20-22.
Because there is no genuine dispute as to any material fact and DMA cannot meet its
heavy burden to establish the unconstitutionality of the Law, summary judgment for
Defendant on Counts I and II is warranted.
The Sales and Use Tax Scheme
The Law does not exist in a vacuum. Rather, it is a tool for DOR to enforce and
collect the long-existing sales and use tax. Colorado enacted a sales tax in 1935 and a
complementary use tax in 1937. Use tax is due on the storage, usage or consumption
of tangible property within Colorado when sales tax has not been paid. Colo. Rev. Stat.,
§ 39-26-202. The use tax aims to capture loss of sales tax revenue when sales are
diverted out of state or are accomplished remotely, as through catalog purchases or via
the Internet. The obligation to pay the sales or use tax is upon the consumer. J.A.
Tobin Construction Co. v. Weed, 407 P.2d 350, 353 (Colo. 1965).
The purpose of a complementary sales and use tax scheme is to make all
tangible property used or consumed in the state subject to a uniform tax burden,
regardless of whether it is acquired within or without the state. Halliburton Oil Well
Cementing Co. v. Reily, 373 U.S. 64, 66 (1963). Another proper function of this scheme
is to “put local retailers subject to the sales tax on a competitive parity with out-of-state
retailers exempt from the sales tax.” Nat’l Geographic Soc’y v. Cal. Bd. of Equalization,
430 U.S. 551, 555 (1977) (noting the constitutionality of such schemes is settled). The
constitutionality of Colorado’s use tax is not at issue. By its very nature, the use tax is a
facially discriminatory tax. The Supreme Court, however, long ago determined that
when paired with the sales tax of the same rate, it does not run afoul of the dormant
Commerce Clause. Henneford v. Silas Mason Co., Inc., 300 U.S. 577 (1937).
Also not in dispute is the ability of states, in certain circumstances, to require
retailers to collect the sales and use tax from consumers and remit it to the state. In
Colorado, retailers doing business in the state must obtain a license, calculate the state
and local sales tax due, including determining whether any exemptions apply, collect
the tax at the time of the transaction, file a return, remit the tax collected to the state,
and maintain records. See Colo. Rev. Stat. §§ 39-26-101 through 39-26-127. Only
those retailers with a physical presence within the state, however, may be required to
collect sales and use tax on behalf of the state. See infra Part III (discussing the
holdings in Quill Corp. v. N.D., 504 U.S. 298 (1992) and Nat’l Bellas Hess, Inc. v. Dept.
of Revenue of Ill., 386 U.S. 753 (1967)). The result is that national retailers with
locations in Colorado, like Barnes & Noble or Target, and in-state companies must
collect and remit sales tax. Internet and mail-order companies with no physical
presence in the State, like Amazon.com or L.L. Bean, are not required to do so.
The Tax Gap in the Age of the Internet
The challenge that states face is the growing gap between what is owed and
what is paid in sales and use tax. Consumers, whether unknowingly or willfully, often
fail to pay the tax they owe if it is not collected at the point of sale. This problem is
compounded by the explosion in Internet sales (“E-commerce”), which reached $3
trillion nationwide in 2008. Ex. 1, Decl. Professor William Fox, Ex. A thereto (“Fox
Report”), p.2. As consumers make more and more purchases via the Internet and
through other remote transactions from businesses that do not collect the sales and use
tax, the tax gap widens. Id; see also, Fair Hous. Council v. Roomates.com LLC, 521 F.
3d 1157, 1164 n.15 (9th Cir. 2008) (the Internet is the "dominant and perhaps the
preeminent means in which commerce is conducted"). DMA does not dispute whether
these taxes are owed; consumers’ tax obligations are independent of the Law. Rather,
DMA challenges one method to enhance the State’s ability to collect revenue due.
Although Congress has the expertise and authority to address a comprehensive
national scheme to address the state sales and use tax gap, it has not yet done so.
See Quill, 508 U.S. at 318. In the absence of any action by Congress, the states,
including Colorado, have approached this significant challenge in different ways. See,
e.g., Amazon.com, LLC v. N.Y. State Dep’t of Taxation & Fin., 913 N.Y.S.2d 129 (N.Y.
App. Div. 2010) (discussing New York law requiring certain on-line retailers to collect
sales tax on purchases by residents). Such is the proper role of the States as
laboratories for economic policy. See New State Ice Co. v. Liebmann, 285 U.S. 262,
311 (1932) (Brandeis, J. dissenting) (“It is the happy incidents of the federal system that
a single courageous State may, if its citizens choose, serve as a laboratory; and try
novel social and economic experiments without risk to the rest of the country.”).
Just as the use tax supports enforcement of the sales tax, the notice and
reporting requirements of the Law are additional enforcement tools to collect from
consumers taxes owed on purchases from non-collecting retailers. The Law is based
on well-documented research which demonstrates that compliance dramatically
improves when a third party reports taxable activity to the taxing authority. Ex. 2,
“Reducing the Federal Tax Gap- A Report on Improving Voluntary Compliance” (the
“Tax Gap Study”), p.6; see also Leandra Lederman, Reducing Information Gaps to
Reduce the Tax Gap: When is Information Reporting Warranted?, 78 Fordham L. Rev.
1733, 1738-1739 (March, 2010) (comparing third party information reporting to red light
cameras “spurring compliance in the first instance” because the taxpayer is aware the
government is watching). 1 The Law aims to improve compliance by requiring noncollecting retailers that sell to Colorado consumers to meet three requirements. 2
Without these reporting provisions, the transactions on which use tax is due
remain invisible to DOR. The reporting provisions first require non-collecting retailers to
notify purchasers that although sales tax is not collected, the purchase may be subject
to Colorado’s use tax (the “Transactional Notice”). Reg. 39-21-112.3.5(2). Second,
non-collecting retailers must send to customers who purchase more than $500 from the
retailer in a year an annual summary listing the dates, general categories, and amounts
of their purchases and reminding them of their use tax obligation (the “Annual Purchase
Summary”). Reg. 39-21-112.3.5(3). Third, non-collecting retailers must send an annual
The Law is but one tool DOR may use in enforcing its lawful compensatory use tax. See also Colo.
Rev. Stat. § 39-21-112(3.5)(a) (providing for DOR’s subpoena authority). The Law is consistent with the
flexibility allowed to states to regulate and tax through a variety of mechanisms. See, e.g., Gregg Dyeing
Co. v. Query, 286 U.S. 472, 480 (1932) (a state is not required to put all requirements in one statute,
rather, it may distribute them as it sees fit as long as the totality of the result is not unconstitutional);
Assoc. Indus. of Mo. v. Lohman, 511 U.S. 641, 655-656 (1994) (a state may “place provisions perfecting
a compensatory tax scheme in two or more statutes”).
The Law exempts from these requirements non-collecting retailers with less than $100,000 in gross
annual sales in Colorado. Reg. 39-21-112.3.5(1)(a).
report to DOR listing only customer names, addresses, and total amounts spent (the
“Customer Information Report”). Reg. 39-21-112.3.5(4).
The Law supports the State’s strong interest in increasing compliance with its tax
laws and collecting revenue for the public’s benefit and promotes a level playing field for
in-state and out-of-state retailers. The Law also educates consumers about their sales
and use tax obligations and provides them with the information to accurately report and
pay the tax due. Additionally, DOR can use the information reported to assess
compliance and recover tax due from consumers who fail to pay use tax. The Law
imposes neither tax liability nor any obligation to collect and remit sales tax. 3
STATEMENT OF UNDISPUTED FACTS
The following facts are undisputed:
E-commerce in the United States has nearly tripled over the last decade,
from $1.06 trillion in 2000 to $3.16 trillion in 2008. Ex. 1, Fox Report, p.2. As a result,
state and local governments and their economies experience increased evasion of
sales and use taxes and the resulting lost revenue, lost sales by Main Street vendors
who must collect sales tax, and the economically inefficient alteration of business
practices to avoid collection responsibility. Id. States collect taxes due on E-commerce
much less effectively because vendors are often not required to collect and remit the tax
and buyer compliance with the use tax is frequently very weak. Id. Colorado state and
local governments are estimated to fail to collect hundreds of millions of dollars in sales
Because the Law is a tool to enforce the use tax, enjoining its enforcement could implicate the Tax
Injunction Act, 28 U.S.C. § 1341, which provides that federal courts “shall not enjoin, suspend or restrain
the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy
may be had in the courts of such State.”
or use tax due on E-commerce sales between 2010 and 2012. Id. Colorado also loses
revenue that is uncollected on remote sales, such as from mail order firms. Id.
Sales and use tax revenue historically account for approximately one third
of the State of Colorado’s General Fund. Ex. 3, Decl. Todd Saliman, ¶ 8.
The United States Department of the Treasury, Internal Revenue Service
has conducted research on the income tax gap, the “aggregate amount of true tax
liability imposed by law for a given tax year that is not paid voluntarily and timely.” Ex.
2, Tax Gap Study, p.6. This research indicates that compliance with tax laws
dramatically increases when a third party reports taxable activity to the taxing authority.
Id. (relevant portions highlighted, see, e.g., pp. 12-16).
Retailers utilizing direct marketing methods need not have facilities,
employees, or property in a state to sell to consumers in the state. Am.Compl., ¶ 9.
Many direct marketers have no physical presence in Colorado, but sell
products and services to Colorado consumers from outside the state using
instrumentalities of interstate commerce. Id. at ¶ 9.
Retailers with a physical presence in Colorado are required under
Colorado law to obtain a sales tax license from DOR and to collect and remit Colorado
sales tax to DOR on all non-exempt, retail sales. Id. at ¶ 16.
Effective March 1, 2010, Colorado enacted House Bill 10-1193, codified at
Colorado Revised Statutes Section 39-21-112(3.5), imposing new notice and reporting
obligations upon “each retailer that does not collect Colorado sales tax.” Id. at ¶¶ 1, 21.
Under the Law, out-of-state retailers that agree to collect Colorado sales
tax, even though they have no obligation to do so under Colorado law and the United
States Constitution, are not required to comply with the requirements for the notice and
reporting requirements of the Law. Id. at ¶ 26.
Of the Internet retailers listed in the publication Top 500 Internet Retailers,
at least 39 do not have a physical presence in the State of Colorado but nevertheless
collect Colorado sales tax. Ex. 4, Decl. Elizabeth Corujo, ¶¶ 4, 6.
Because the Law exempts retailers with less than $100,000 in gross
annual sales in Colorado, the vast majority of retailers in the country are not subject to
the Law. Ex. 5, Decl. Dieter Gable, Ex. 1 thereto (“Gable Report”), pp.5-6.
The Law provides leeway for variance in approaches to compliance,
allowing affected retailers to comply with reasonable efforts. Ex. 5, Gable Report, p.6.
There are many ways a retailer can comply with the Transactional Notice
requirement- from a linking notice or popup window at the time of the online purchase,
to slipping the notice in as a packing slip for delivery, or other workarounds. Ex. 6,
Deposition of Curtis Barry, 93:9-94:6; 94:13-15; 95:10-20; 97:20-98:1. DMA’s expert
estimates a packing insert costs less than ten cents per package. Id. at 226:3-5.
DOR has provided acceptable sample language for the Transactional
Notice, which retailers may use. Ex. 7, Decl. Shirley Stevens, Ex. A thereto, “FYI Sales
79;” Ex. B thereto “Transactional Notice Template.”
Data for the Annual Purchase Summary and Customer Information Report
already exists. Ex. 6, Barry Dep., 157:5-6; 158:5-16. Retailers track customer data in
very detailed ways and store that data. Id; Ex. 5, Gable Report, pp.8-9.
Because the Law only requires the Annual Purchase Summary for
customers who spend more the $500 annually, Mr. Barry estimates that retailers would
have to create reports for fewer than 20% of Colorado purchasers, and it could be as
low as 10%. Ex. 6, Barry Dep. 169:11-20; 170:3-5.
DOR has provided instructions and templates to assist retailers with
preparing and electronically filing the Annual Purchase Summary. Ex. 8, Decl. Edward
Thompson, ¶¶ 5-6; Exs. A-D thereto.
SUMMARY JUDGMENT STANDARDS AND BURDEN OF PROOF
Summary judgment is proper when there is no genuine dispute as to any material
fact and a movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A dispute is “genuine” if the
evidence is so contradictory that a judgment could enter for either party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “material” if it might reasonably
affect the outcome of the case. Id. The moving party has the initial burden to show
“that there is an absence of evidence to support the nonmoving party’s case.” Celotex,
477 U.S. at 325. When considering a motion for summary judgment, a court views the
evidence in the light most favorable to the non-moving party. Garrett v. HewlettPackard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).
DMA bears a heavy burden in overcoming the “‘venerable presumption’ that an
act of a state legislature is generally taken to be constitutional.” Hopkins v. Okla. Pub.
Employees Retirement Sys., 150 F.3d 1155, 1160 (10th Cir. 1998). Facial challenges
to statutes are generally disfavored as “strong medicine” applied “sparingly and only as
a last resort.” Golan v. Holder, 609 F.3d 1076, 1094 (10th Cir. 2010) (quoting Nat’l
Endowment for the Arts v. Finley, 524 U.S. 569, 580 (1998)). To demonstrate that the
Law is facially unconstitutional, DMA must show “that no set of circumstances exists
under which [the Law] would be valid,” United States v. Salerno, 482 U.S. 739, 745
(1987), or that the Law “lacks any plainly legitimate sweep,” Washington v. Glucksberg,
521 U.S. 702, 740 n.7 (1997). United States v. Stevens, __U.S.__, 130 S.Ct 1577,
1587 (2010). To establish that the Law is unconstitutional as applied, DMA must
establish beyond a reasonable doubt that the Law as applied to its particular situation is
unconstitutional. United States v. Platte, 401 F.3d 1176, 1189 (10th Cir. 2005).
Because there is no genuine dispute as to any material fact and DMA cannot
overcome the presumption of constitutionality of the Law, summary judgment for
Defendant on Counts I and II is warranted.
THE LAW FURTHERS RATHER THAN OFFENDS COMMERCE CLAUSE
The Commerce Clause establishes both an affirmative power in Congress to
regulate commerce amongst the states and also a dormant limitation on the power of
the states to enact laws that impose substantial burdens on such commerce.
Kleinsmith v. Shurtleff, 571 F.3d 1033, 1039 (10th Cir. 2009). The “fundamental
objective” of the dormant Commerce Clause is to preserve a “national market for
competition undisturbed by preferential advantages conferred by a State upon its
residents or resident competitors.” Gen. Motors Corp. v. Tracy, 519 U.S. 278, 299
(1997); see also Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 351 (1977)
(referring to “the Commerce Clause’s overriding requirement of a national ‘common
market’”); H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525 (1949) (Commerce Clause
fosters a system of “free access to every market in the Nation” where consumers may
“look to the free competition from every producing area in the Nation to protect him from
exploitation by any.”). The modern law of the dormant Commerce Clause is “driven by
concern about economic protectionism-- that is, regulatory measures designed to
benefit in-state economic interests by burdening out-of-state competitors.” Dep’t of
Revenue of Ky. v. Davis, 553 U.S. 328, 337-338 (2008).
The Law, part of Colorado’s sales and use tax scheme, advances rather than
offends the objectives of the Commerce Clause. This scheme is not protectionist but
rather, encourages open competition and tax neutral decisions by consumers. National
retailers with stores in Colorado as well as Colorado businesses are at a competitive
disadvantage because they must collect sales tax on their in-store and online sales.
See Quill, 504 U.S. at 328-329 (White, J. dissenting) (an out-of-state business can
undercut in-state companies with its comparative price advantage in selling products
free of use tax). The Supreme Court has recognized that a proper function of
complementary sales and use tax schemes is to “put local retailers subject to the sales
tax on a competitive parity with out-of-state retailers exempt from the sales tax.” Nat’l
Geographic Soc’y, 430 U.S. at 555 (noting the constitutionality of such schemes is
settled); see also Boston Stock Exch. v. State Tax Comm’n, 429 U.S. 318, 332 (1977)
(compensatory taxes leave a consumer free to make choices without regard to tax
consequences). The Law promotes such competitive parity by reducing the artificial
competitive advantage currently enjoyed by non-collecting retailers due to the safe
harbor created by Nat’l Bellas Hess, Inc. v. Dep’t of Revenue of the State of Ill., 386
U.S. 753 (1967) and Quill Corp. v. N.D., 504 U.S. 298 (1992). Further, by educating
consumers about their use tax obligation, the Law promotes an open market where
consumers are not mislead that no tax is due merely because it was not collected.
DEFENDANT IS ENTITLED TO SUMMARY JUDGMENT ON COUNT I.
DMA cannot meet its heavy burden to establish that the Law discriminates
against interstate commerce or favors in-state retailers by burdening out-of-state
retailers. 4 State laws that discriminate against interstate commerce or have the effect of
favoring in-state economic interests over out-of-state interests are virtually per se
invalid. Kleinsmith, 571 F.3d at 1039-1040. When, however, a law regulates evenhandedly with only incidental effects on interstate commerce, it will be upheld unless the
burden on interstate commerce clearly exceeds the local benefits. Id.
Defendant is entitled to summary judgment on Count I for three reasons. First,
the Law is not a protectionist measure and does not discriminate because it gives non4
While discrimination and burdens are two separate components of dormant Commerce Clause analysis,
both Counts I and II allege the Law unduly burdens out-of-state retailers and interstate commerce. See
Am.Comp., ¶¶ 58-61; 68. Consequently, Part II.B. infra will address the burdens that allegedly put outof-state retailers at a competitive disadvantage to in-state retailers. Part III.B. infra will focus on the
unique burdens identified by Quill as allegedly applicable to out-of-state retailers due to the Law.
collecting retailers the choice to be subject to the same burden imposed on their in-state
competitors who have no such choice. Second, even absent this ability to choose, the
Law does not favor in-state retailers over out-of-state retailers. Third, any effect on outof-state retailers as a result of the Law is incidental and does not outweigh the strong
State interest in enforcing and collecting the sales and use taxes.
DMA Cannot Prove That the Law Discriminates Against Out-of-State
Retailers or Interstate Commerce.
The Law is not a protectionist measure and does not discriminate against
interstate commerce because it allows non-collecting retailers the ability to choose to be
subject to the same burden imposed on their in-state competitors who have no such
choice- that is, in-state retailers cannot elect to comply with the Law rather than collect
and remit the sales tax. Discrimination for purposes of the dormant Commerce Clause
focuses on whether a law is motivated by economic protectionism, defined by laws that
burden out-of-state businesses simply to give a competitive advantage to in-state
businesses, Granholm v. Heald, 544 U.S. 460, 472 (2005), or shield in-state industries
from out-of-state competition. Maine v. Taylor, 477 U.S. 131, 148 (1986). The Framers’
purpose was to “preven[t] a State from retreating into economic isolation or jeopardizing
the welfare of the Nation as a whole, as it would do if it were free to place burdens on
the flow of commerce across its borders that commerce wholly within those borders
would not bear.” Fulton Corp. v. Faulkner, 516 U.S. 325, 330-331 (1996) (quoting Okla.
Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 180 (1995)).
Nothing in the Law, part of Colorado’s sales and use tax scheme, suggests it
discriminates or is aimed at protectionism or market manipulation to favor in-state
interests. DMA’s discrimination claim is based on the limited applicability of the Law to
out-of-state retailers. See Am.Compl., ¶¶ 1,57-58 (alleging the Law targets such
retailers and does not apply to Colorado retailers). 5 The Law, however, is indifferent to
a retailer’s location and focuses solely upon whether a retailer collects the sales tax.
See, e.g. Colo. Rev. Stat. § 39-21-112(3.5)(c) (referring to “each retailer that does not
collect Colorado sales tax.”). These two classes of collecting retailers and noncollecting retailers are a function of the Supreme Court’s holdings in Quill and Bellas
Hess, not the Law’s alleged targeting of out-of-state retailers. See infra Part III.A.
More importantly, the Law does not discriminate because non-collecting retailers
may choose between two alternatives: either collecting and remitting sales tax or
complying with the notice and reporting requirements of the Law. In fact, many large
retailers without physical presence in Colorado voluntarily choose to collect. See Ex. 4,
Decl. E. Corujo, ¶¶ 4,6 (39 of the companies listed in the publication Top 500 Internet
Retailers are without physical presence but elect to collect sales tax). Retailers with a
physical presence within the State do not have a choice-- they must collect sales tax or
face civil and criminal penalties. Id. at §§ 39-26-103(4); 39-21-118(2). DMA, therefore,
DMA’s facial challenge based upon the title of the bill, referring to “out-of-state retailers,” is a red herring.
See Am.Compl., ¶ 1. HB10-1193 as originally introduced required certain retailers to collect sales and
use tax while the challenged Law as adopted imposes no such duty to collect. The bill was substantially
amended to its current form; however, the title did not change.
cannot prove that the Law discriminates against non-collecting retailers by providing
them with a choice when their competitors have no such choice.
Even Absent an Ability to Choose, DMA Cannot Prove the Law
Favors In-State Retailers Over Out-of State Retailers.
Even assuming out-of-state retailers had no choice and were required to abide
by the Law without the option of collecting the sales tax, DMA cannot meet its heavy
burden to prove the Law favors in-state collecting retailers. Differential treatment alone
does not suffice to establish a Commerce Clause violation. Rather, a law discriminates
if it imposes “differential treatment of in-state and out-of-state economic interests that
benefits the former and burdens the latter.” Or. Waste Sys., Inc. v. Dep’t of Env. Quality
of State of Or., 511 U.S. 93, 99 (1994) (emphasis added); see also Boston Stock Exch,
429 U.S. at 329 (Commerce Clause precludes discrimination that creates a “direct
commercial advantage to local business”) (emphasis added); Am. Trucking Ass’n, Inc.
v. Mich. Pub. Serv. Comm’n, 545 U.S. 429, 433 (2005) (same).
Because discrimination may not be apparent from the face of a law but may lie in
its effects, the Supreme Court has taken a holistic approach to evaluate the challenged
components of regulatory and tax schemes. See, e.g., West Lynn Creamery, Inc. v.
Healy, 512 U.S. 186 (1994). Dormant Commerce Clause analysis thus requires
consideration of the challenged law in the context of other related laws. For example, in
West Lynn Creamery, the Court struck down a seemingly non-discriminatory
Massachusetts pricing order that imposed an assessment on all milk dealers selling to
state residents. Id. at 198-202. The assessments were paid to a state fund which
made distributions only to in-state dairy farmers. The Court rejected the argument that
since the pricing order and subsidy program each was constitutional, the combination of
the two was equally valid. Id. Similarly, in striking down the franchise tax in S. Cent.
Bell Telephone Co. v. Ala., 526 U.S. 160, 169 (1999), the Court examined not only the
challenged franchise tax but other provisions of state law allowing in-state corporations
flexibility in setting their tax base while out-of-state corporations were denied that ability.
The Law does not exist in a vacuum. It is one method to enforce the State’s
sales and use taxes and must be evaluated within this scheme. See Matthews, 562
P.2d at 417 (use tax is not a separate tax from the sales tax and should not be viewed
in isolation). Any challenge to the Law on dormant Commerce Clause grounds must
weigh the relative burdens of Colorado’s sales and use tax scheme on non-collecting
retailers as compared to collecting retailers, rather than viewing in isolation the Law’s
application to out-of-state retailers.
DMA cannot prove that non-collecting retailers are put at a competitive
disadvantage as a result of the Law. In Colorado, retailers that are required to collect
sales tax must take extensive steps to comply with state tax laws, including, obtain a
license, calculate the state and local sales tax owed, including determining whether any
exemptions apply, collect the tax at the time of the transaction, provide a receipt, file a
return and remit tax collected to the State on a monthly or quarterly basis, and maintain
records. Colo. Rev. Stat. §§ 39-26-101 through 39-26-127. Collecting retailers are
ultimately liable for paying the tax, whether or not they collect it. See id. at § 39-26-105.
DMA cannot prove that burdens upon out-of-state non-collecting retailers as a result of
the Law outweigh burdens upon collecting retailers.
DMA alleges two burdens upon non-collecting retailers as a result of the Law:
compliance costs and loss of sales and customers. Am.Compl. ¶¶ 59-60. DMA relies
upon three experts to establish these alleged burdens. All three experts, however,
utilized flawed methodology resulting in opinions that amount to no more than
speculation. See Cardoso v. Calbone, 490 F.3d 1194, 1197 (10th Cir. 2007)
(“Evidence, including testimony must be based on more than mere speculation,
conjecture, or surmise. Unsubstantiated allegations carry no probative weight in
summary judgment proceedings.”); see also Def.’s Am. Mot. Exclude Test. of Pl.’s
Expert Witnesses F. Curtis Barry, Thomas Adler, and Kevin Lane Keller, filed December
20, 2010 [Dkt. #71] (“Def.’s 702 Mot.”). 6
With respect to the alleged compliance costs, there are two important things to
note. First, the Law exempts retailers with less than $100,000 in annual gross sales in
CO. Reg. 29-31-112.3.5(1)(1). A relatively small number of retailers are thus actually
subject to the Law. Ex. 5, Gable Report, pp.5-6. DOR’s expert, Mr. Gable, concluded
that of those retailers subject to the Law, larger retailers can comply with the law with
minimal effort as part of regular technical enhancements. Id. at p.11. The associated
costs are so inconsequential, particularly when viewed as a percentage of sales, that
In the Order dated January 26, 2011 [Dkt. #78], the Court deferred resolution of this Motion “pending
further developments in this case.” Given the parties are moving toward final judgment, it is appropriate
for the Court to consider the Motion.
they cannot be quantified. Id. According to Mr. Gable, smaller retailers may have some
initial costs but those will likely be tied to software upgrades and may be absorbed by
the software vendors on whom they currently rely for their E-commerce platforms. Id. at
pp.7-10. Second, DMA relies solely upon the estimates of its expert Mr. Barry rather
than upon any actual costs its members have or expect to incur. Notably, DMA
presented no data showing actual losses sustained by its members from the
Transactional Notice, effective March 1, 2010.
When viewed in the context of retailers operations, the burdens the Law places
on retailers are insubstantial. There are many ways a retailer can meet the
Transactional Notice requirement-- from a linking notice or popup window at the time of
the online purchase, to slipping the notice in as a packing slip for delivery, or other
workarounds. Ex.6, Barry Dep. 93:9-94:6; 94:13-15; 95:10-20; 97:20-98:1. DOR has
provided sample language for the notice and DMA’s expert, Mr. Barry, estimates that a
simple packing insert costs less than ten cents per package. Ex 7, Decl. S. Stevens,
Ex. B thereto, Transactional Notice Template; Ex. 6, Barry Dep. 226:3-5.
Regarding the Annual Purchase Summary and Customer Information Report, it is
undisputed that the data used to create these reports already exists because retailers
track customer data in very detailed ways. Id. at 157:5-6; 158:5-16. Given the existing
tracking and manipulation of this information, Mr. Gable concluded that the additional
incremental effort to create these reports is minimal. Ex. 5, Gable Report, pp.13-14.
DOR has also provided instructions and templates to assist retailers with preparing and
electronically filing the Annual Purchase Summary. Ex. 8, Decl. E. Thompson, ¶¶ 5-6;
Exs. A-D thereto. Further, because the Law only requires the Annual Purchase
Summary for customers who spend more the $500 annually, DMA’s expert, Mr. Barry,
estimates that retailers would have to create reports for fewer than 20% of Colorado
purchasers, and it could be as low as 10%. Ex. 6, Barry Dep. 169:11-20; 170:3-5.
Lastly, DMA alleges its members will suffer lost sales and customers due to
consumers’ perceived invasion of privacy by the Law. Am.Compl. ¶ 60. DMA, however,
cannot establish beyond speculation that its members will sustain such losses. DMA
presented no actual numbers of lost sales or customers, but instead relies on
projections by two experts, Drs. Adler and Keller. Their projections are wholly based on
a survey, the methodology of which was fatally flawed in at least four respects. See
Def.’s 702 Mot., pp.11-14 (the methodology contained a fatal confound, contained false
information, suggested a response, and did not follow survey standards). Most
significantly, the survey confounded consumer privacy concerns with consumer tax
aversion and resistance to having information turned over to DOR for tax collection. Ex.
9, Decl. Prof. Donald Lichtenstein, Ex. A thereto (“Lichtenstein Report”), pp.12-17. Dr.
Adler admitted that the survey should be designed to determine whether a seller's
reporting of information to the Department would cause consumers not to make future
purchase or whether this result would be caused by a resistance to paying taxes and
thus higher prices on purchases. As he explained:
Okay. Next is May 19th. Can you tell me what
that note is?
So this looks like kind of a repeat of the
specific objectives, what we wanted to find out.
So you wanted to find out whether turning over the
information will cause people to not purchase?
Right, versus not paying taxes. We wanted to
avoid getting into the issue of people not liking
to pay taxes because we know nobody does.
Ex. 10, Adler Dep. 137:15 - 23. Nevertheless, Dr. Adler made no effort to factor
tax avoidance or higher prices out of his survey methodology. Ex. 9, Lichtenstein
Report, pp.15-17. The survey did not follow established methodologies for factoring out
this confound. Id. at pp. 16-17. With price/tax being a potential cause for consumer
behavior, it should have been measured and “covaried” out. Id. at p.16. Because the
privacy concern cannot be disentangled from a price/tax concern, no conclusions may
be drawn from the survey results. Id. at 13. Due to this serious confound alone, the
survey methodology is “fatally flawed”. Id. at 14.
DOR’s expert, Professor Lichtenstein, concluded that to the extent consumers
change behavior, if at all, as a result of the Law, it is in reaction to a higher price/tax
liability (because they now understand tax is owed although not collected). Id. at pp.6,
13-16. This type of loss does not fall within the protections of the dormant Commerce
Clause. See, e.g., Gen. Motors. Corp., 519 U.S. at 300 (dormant Commerce Clause
protects markets and market participants, not individuals). Regulations designed to
protect in-state interests from out-of-state competition by eliminating a competitive
advantage earned by an out-of-state interest have been struck down. See, e.g., Hunt,
432 U.S. at 351 (law had effect of “stripping away” the competitive and economic
advantages the out-of-state apple industry had “earned for itself” through an expensive
inspection and grading system). Here, out-of-state retailers have not “earned for
themselves” the artificial market advantage created by the Bellas Hess/Quill safe
harbor. See Scott W. Gaylor & Andrew Haile, Constitutional Threats in the ECommerce Jungle: First Amendment and Dormant Commerce Clause Limits on
Amazon Laws and Use Tax Reporting Statutes, N.C. Law Rev. (forthcoming), available
at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1773685, p.77. The dormant
Commerce Clause does not entitle DMA members to protection of their market share of
customers who seek to evade tax liability. DMA cannot meet its heavy burden to prove
the Law favors in-state retailers over out-of-state retailers.
DMA Cannot Prove the Incidental Effects of the Law on Out-of-State
Retailers Are Clearly Excessive in Relation to Colorado’s Interest in
Enforcing its Sales and Use Tax Laws.
Because the Law regulates even-handedly and any incidental effects on out-ofstate retailers are not clearly excessive in relation to the strong state interest in
enforcing its tax laws it must be upheld. See Pike v. Bruce, 397 U.S. 137, 142 (1970);
see also Quik Payday, Inc. v. Stork, 549 F.3d 1302 (1309 (10th Cir. 2008) (“The states
can, of course, pass Acts which affect commerce unless the burden so imposed greatly
exceeds the extent of the local benefits.”). The Supreme Court has long recognized
that even interstate commerce must be made to pay its fair share of the state tax
burden, even if it increases the cost of doing business. W. Live Stock v. Bureau of
Revenue, 303 U.S. 250, 254 (1938). Further, “the modes adopted [by the states] to
enforce the taxes levied should be interfered with as little as possible.” Dows v. City of
Chicago, 78 U.S. 108, 110 (1871) (emphasis added).
The Law advances three strong state taxing authority interests. First, the Law
enhances DOR’s ability to recover sales and use tax revenue due to the State, a vital
component of the State budget. See Ex. 3, Decl. T. Saliman, ¶¶ 7-8.
Haulers Assoc., Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330, 346
(2007), the Court applied a truncated analysis under Pike and determined that “[w]hile
revenue generation is a not a local interest that can justify discrimination against
interstate commerce…it is a cognizable benefit for purposes of the Pike test.” Id. at
346; see also C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 429 (1994)
(protection of the public fisc is a legitimate non-protectionist benefit); Donald H. Regan,
The Supreme Court and State Protectionism: Making Sense of the Dormant Commerce
Clause, 84 Mich. L. Rev. 1091, 1120 (May, 1986) (“[R]aising revenue for the state
treasury is . . . a federally cognizable benefit.”).
Second, the Law, an enforcement mechanism of the sales and use taxes,
promotes the fair distribution of the cost of government. The levying of taxes is a proper
means of distributing the burden of the cost of government and is a fundamental
principle of government existing primarily to provide for the common good.
Commonwealth Edison Co. v. Mont., 453 U.S. 609, 622-623 (1981) (citing Carmichael
v. S. Coal & Coke Co., 301 U.S. 494, 521-533 (1937); see also Quill, 504 U.S. at 328
(White, J. dissenting) (an out-of-state business derives numerous commercial benefits
from the state in which it does business, such as sound local banking institutions to
support credit transactions and courts to ensure collection of the purchase price).
Third, the Law promotes respect for and compliance with the tax laws. See St.
German of Alaska E. Orthodox Catholic Church v. United States, 840 F. 2d 1087, 1094
(2d Cir. 1988) (enforcement of tax laws is a compelling governmental interest); United
States v. Richey, 924 F.2d 857, 862 (9th Cir. 1990) (maintaining a workable tax system
is a compelling governmental interest); Schehl v. Comm’r of Internal Revenue, 855 F.2d
364, 367 (6th Cir. 1988) (promoting public compliance with the tax laws is a legitimate
governmental interest). Any differential burden upon DMA members due to the Law is
incidental and does not clearly outweigh these strong State interests.
DEFENDANT IS ENTITLED TO SUMMARY JUDGMENT ON COUNT II.
DMA cannot prove that the Law is an improper regulation of and imposes an
undue burden upon interstate commerce because it imposes notice and reporting
requirements upon retailers with no physical presence in Colorado. DMA argues for an
extension of the bright-line rule of Quill beyond the area of sales and use tax collection
and remittance, essentially seeking the recognition of a regulatory-free zone to which its
members are not entitled under existing Commerce Clause precedent. Quill’s carefullylimited physical presence requirement and the policy considerations underlying the
burdens analysis do not apply to the notice and reporting requirements of the Law which
do not impose a duty to collect the sales and use tax. As a result, DMA’s claim fails as
a matter of law, and summary judgment for Defendant on Count II is appropriate.
DMA Cannot Prove the Law Improperly Regulates Interstate
Commerce or Runs Afoul of Quill.
DMA members without a physical presence in Colorado are not protected from
the reach of the Law by the carefully limited bright-line rule of Bellas Hess and Quill,
which applies only to sales and use tax collection and remittance obligations. In Bellas
Hess, the Court held that a state could not, consistent with due process requirements
and the dormant Commerce Clause, impose a use tax collection obligation on a mailorder company whose only connection with customers in the state was by common
carrier or the United States mail. 386 U.S. at 758. Twenty-five years later in Quill, the
Court revisited the same issue. 504 U.S. 298. Noting that claims under the Due
Process and Commerce Clauses are “closely related,” the Court determined that they
nevertheless impose distinct limits on state taxing powers. Id. at 305. Under the
former, only a “minimum connection” between the state and the person, property, or
transaction subject to the tax is required. Id. at 306. The Court thus overruled Bellas
Hess to the extent it required physical presence for the imposition of the duty to collect
use tax on due process grounds. Id. at 308 (“In ‘modern commercial life’ it matters little
that such solicitation is accomplished by a deluge of catalogs rather than a phalanx of
drummers: The requirements of due process are met irrespective of a corporation’s lack
of physical presence in the taxing state.”). Under the Commerce Clause, however, the
Court affirmed the physical presence rule of Bellas Hess in the specific context of the
duty to collect use taxes. Id. at 317-318.
The main rationale for adhering to the physical presence requirement for
imposition of the duty to collect sales and use tax was the principle of stare decisis and
the perceived “substantial reliance” by the industry upon the bright-line Bellas Hess rule.
Id. at 317. In particular, the Quill Court was very concerned about the retroactive
consequences of overruling Bellas Hess and creating an unanticipated tax liability that
could result if the mail-order industry was subjected to a collection duty. 504 U.S. at
318 n.10. Acknowledging the “artificiality” of this rule, the Court noted the benefit of
encouraging settled expectations, which foster investment in the industry. Id. at 315316. Recognizing that it had not adopted a similar bright-line rule in other types of tax
cases, the Court noted that “[t]his aspect of our decision is made easier by the fact that
the underlying issue is not only one that Congress may be better qualified to resolve,
but also one that Congress has the ultimate power to resolve.” Id. at 318; see also John
A. Swain, State Income Tax Jurisdiction: A Jurisprudential and Policy Perspective, 45
Wm. & Mary L. Rev. 319, pp.343-344 (2003).
Quill is explicitly and consistently limited to the imposition of the sales and use
taxes and the imposition of the duty to collect those taxes. See, e.g., 504 U.S. at 308
(“Comparable reasoning justifies the imposition of the collection duty on a mail-order
house that is engaged in continuous and widespread solicitation of business within a
State.”); id. (“the Due Process Clause does not bar enforcement of …the use tax
against Quill.”); id. at 315 (“Under Bellas Hess, [vendors lacking physical presence] are
free from state-imposed duties to collect sales and use taxes.”); id. (“Such a rule firmly
establishes the boundaries of legitimate state authority to impose a duty to collect sales
and use taxes and reduces litigation concerning those taxes.”); id. at 318 (“Congress is
now free to decide whether, when, and to what extent the States may burden interstate
mail-order concerns with a duty to collect use taxes.”) (emphasis added).
The Tenth Circuit and several state appellate courts have followed this analysis
and held that Quill’s physical presence requirement for Commerce Clause nexus is
limited to when a state may require a business to collect and remit sales and use taxes.
In American Target Adver., Inc. v. Giani, 199 F.3d 1241, 1254-55 (2000), the Tenth
Circuit declined to extend Bellas Hess and Quill beyond the levy of taxes upon out-ofstate entities to a state regulatory law. Similarly, in a corporate income tax case, the
Supreme Court of Iowa recently determined that Quill’s physical presence nexus
standard does not extend beyond sales and use tax. KFC Corp. v. Iowa. Dept. of Rev.,
792 N.W.2d 308, 324-328 (Iowa 2010); see also Capital One Bank, v. Comm’r of
Revenue, 899 N.E.2d 76, 84 (Mass. 2009) (noting the Quill Court “explicitly emphasized
on more than one occasion, a narrow focus on sales and use taxes” and declining to
extend physical presence rule to financial institution excises); Tax Comm’r of the State
of W. Va. v. MBNA America Bank, N.A., 640 S.E.2d 226, 232-233 (2007) (same result
in business franchise and corporate income tax case).
The Law’s reporting requirements are more properly characterized as traditional
regulatory requirements as they do not impose or require the collection of a tax, and
thus the extension of Quill’s physical presence rule is not appropriate. Because Quill
applied specifically to the collection and remittance of sales and use tax, stare decisis is
not triggered. Additionally, because the Law does not impose a tax, the retroactivity
considerations that weighed heavily upon the Quill Court are not present here. Out-ofstate businesses without physical presence can be subjected to a wide range of
obligations by a state in which they deliberately avail themselves of economic
opportunities. See, e.g., Quill, 504 U.S. at 319 (Scalia, J. concurring) (discussing state
regulatory jurisdiction including Blue Sky laws); Granholm, 544 U.S. 460 (state liquor
licensing scheme). Further, the development of the Internet and the explosion in ECommerce since Bellas Hess and Quill counsel against the expansion of the special
bright-line rule created to address the unique history and burdens associated with sales
and use tax collection as applied to the direct-mail industry. At the time of Bellas Hess,
the mail order sales industry was $2.4 billion annually. 386 U.S. at 763 (Fortas, J.,
dissenting and predicting that the “haven of immunity,” resulting from the favored
position and exemption from bearing the fair burden of state taxes, will increase in size
and importance). When the Court decided Quill 25 years later, that industry had grown
to $180 billion annually. See 504 U.S. at 329, White, J., dissenting:
Also very questionable is the rationality of perpetuating a rule that creates an
interstate tax shelter for one form of business…but no countervailing advantage
for its competitors. If the Commerce Clause was intended to put businesses on
an even playing field, the majority’s rule is hardly a way to achieve that goal…I
would think that protectionist rules favoring a $180-billion-a-a-year industry might
come within the scope of such “structural concerns.
Reaching $3 trillion in 2008, the E-Commerce is no infant industry and expansion of a
rule that already affords a substantial artificial advantage cuts against the objective of
the dormant Commerce Clause. See Ex. 1, Fox Report, p.2.
Finally, DMA’s claim that the Law seeks to regulate commerce that occurs wholly
outside Colorado is without merit. Am.Compl. ¶ 71. Because the Law is triggered only
when there is a sale to a customer located in Colorado or the goods are shipped to a
Colorado address, there is no concern for regulation of commerce that occurs entirely
outside Colorado. See Reg. 39-21-112.3.5(1)(b) and (c) (defining Colorado Purchaser
and Colorado Purchase, respectively).
DMA Cannot Prove the Law Unduly Burdens Interstate Commerce.
The Quill Court acknowledged the limitations of its decision, and even suggested
that had the issue been presented as a matter of first impression, contemporary
Commerce Clause jurisprudence might not dictate the same result. 504 U.S. at 311.
Contemporary Commerce Clause jurisprudence is what applies to DMA’s claims, and
under these cases, DMA cannot prove the Law’s notice and reporting requirements in
the post-technology boom age of the Internet unduly burden interstate commerce.
In Quill, the Court explained that the Commerce Clause nexus requirement is
informed by the “structural concerns” about the effects of regulation by multiple states
on the national economy.” Id. at 312. Businesses, however, are often subject to
regulation by the various states in which they do business. See, e.g., American
Trucking Ass’n, Inc. v. Mich. Pub. Serv. Comm’n, 545 U.S. 429, 438 (2005) (concluding
that businesses operating in multiple states expect to pay local fees in each of those
states). Further, State regulations are still evaluated by considering what unduly
burdens interstate commerce. See, e.g., Kassel v. Consol. Freightways Corp. of Del.,
450 U.S. 662, 669-671 (1981) (weighing the nature of the regulation in light of the
burden imposed). The dormant Commerce Clause does not seek “to relieve those
engaged in interstate commerce from their just share of state tax burden even though it
increases the cost of doing business.” Commonwealth Edison, 453 U.S. at 623-624.
The world of E-commerce and remote sales looks vastly different from the mailorder world of Quill nearly twenty years ago and the burdens of the Law upon out-ofstate retailers must be viewed through a contemporary lens. Even in 1967, Justice
Fortas recognized the advances of modern technology and criticized the majority for
exempting the direct-mail industry from collection burdens as follows:
The burden is no greater than that placed upon local retailers by comparable
sales tax obligations; and the Court’s response that these administrative and
record keeping requirements could ‘entangle’ appellant’s interstate business in a
welter of complicated obligations vastly underestimates the skill of contemporary
man and his machines. There is no doubt that the collection of taxes from
consumers is a burden; but it is no more of a burden on a mail order
house…located in another State than on an enterprise in the same State which
accepts orders by mail; and it is, indeed, hardly more of a burden than it is on
any ordinary retail store in the taxing State.
Bellas Hess, 386 U.S. at 766 (dissenting) (emphasis added).
While there are some costs associated with compliance with the Law, these are
nominal, particularly when viewed as a percentage of sales revenue. Ex. 5, Gable
Report, p. 2.
Further, the Law allows for substantial compliance by non-collecting
retailers subject to other state requirements. See Regs. 39-21-112.3.5(2)(e); 39-21112.3.5(3)(b) (allowing the Transactional Notice and Annual Purchase Summary to be
in a form generalized to any state if they substantially contain the required information).
The reality is that in the areas of Internet and remote sales, non-collecting
retailers have benefitted from a windfall of customers who either unknowingly or
deliberately avoid paying the sales or use tax due on their transactions. Any reliance
non-collecting retailers have based on the “haven of immunity” Bellas Hess and Quill
created cannot reasonably entitle them to a zone entirely free from any state regulation,
particularly when such retailers have substantial economic presence and profit
handsomely from transactions with Colorado consumers. As the Iowa Supreme
recently noted, it simply does not make sense to require Barnes & Noble to collect and
remit sales tax in connection with its online sales but not impose the same burden on
Amazon.com when the difference is in the manner in which those retailers have chosen
to do business and not the degree to which they benefit from the provision of
government services in the taxing state. KFC Corp., 792 N.W.2d at 326 (“physical
presence is not a meaningful surrogate for economic presence”).
WHEREFORE, Defendant respectfully requests the Court enter an order granting
partial summary judgment in favor of Defendant on Plaintiff’s Counts I and II.
Respectfully submitted this 6th day of May, 2011.
JOHN W. SUTHERS
s/ Melanie J. Snyder
MELANIE J. SNYDER, 35835*
Assistant Attorney General
STEPHANIE LINDQUIST SCOVILLE, 31182*
JACK M. WESOKY, 6001*
Senior Assistants Attorney General
1525 Sherman Street, 7th Floor
Denver, Colorado 80203
Telephone: (303) 866-5273 (Snyder)
Telephone: (303) 866-5241 (Scoville)
Telephone: (303) 866-5512 (Wesoky)
FAX: (303) 866-5395
*Counsel of Record
Attorneys for Defendant
CERTIFICATE OF SERVICE
I hereby certify that on May 6, 2011, I electronically filed the foregoing
Defendant’s Motion for Partial Summary Judgment- Counts I and II (Commerce
Clause) with the Clerk of the Court using the CM/ECF system which will send
notification of such filing to the following e-mail addresses:
Attorneys for Plaintiff
s/ Melanie J. Snyder
cc: Via interoffice mail
Ms. Roxy Huber
Colorado Department of Revenue
1375 Sherman Street
Denver, Colorado 80261