Direct Marketing Association, The v. Huber

Filing 101

RESPONSE to 98 MOTION for Summary Judgment on Counts I and II filed by Defendant Roxy Huber. (Attachments: # 1 Exhibit Ex. 1 - HB10-1193 Reengrossed, # 2 Exhibit Ex. 2 - Williams Decl., # 3 Exhibit Ex. 3 - August 2010 Fiscal Note)(Snyder, Melanie)

Second Regular Session
Sixty-seventh General Assembly

STATE OF COLORADO

REENGROSSED
This Version Includes All Amendments
Adopted in the House of Introduction

HOUSE BILL 10-1193

LLS NO. 10-0739.01 Esther van Mourik

HOUSE SPONSORSHIP
Pommer,

SENATE SPONSORSHIP
Heath,

House Committees

Senate Committees

Finance
Appropriations

A BILL FOR AN ACT
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CONCERNING THE COLLECTION OF SALES

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APPROPRIATION THEREFOR.

BY

OUT-OF-STATE

RETAILERS,

AND

MAKING

AN

Bill Summary

Section 1 of the bill relates to current law requiring a retailer to
collect sales tax from a person residing in this state only if the retailer has
sufficient connections with this state. Commencing March 1, 2010,
section 1 articulates a presumption that any out-of-state retailer that has
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute.

Ex. 1

H O U SE
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Januar 29, 2010
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H O U SE

(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://www.leg.state.co.us/billsummaries.)

Febr y 1, 2010
uar

MADE

3r Readi U nam ended
d
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102

AND USE TAXES ON SALES

a referral relationship with an affiliate has an obligation to collect sales
tax. The bill specifies that the presumption may be rebutted by the
out-of-state retailer if the retailer can show that the affiliate with whom
the retailer has such a relationship did not engage in active solicitation.
The bill defines an affiliate as a person residing in this state that solicits
business by means of a public forum in this state.
Section 2 specifies that, for purposes of any efforts to collect use
tax, the executive director of the department of revenue may issue a
subpoena to any out-of-state retailer if the out-of-state retailer refuses to
voluntarily furnish specific information when requested and may take the
out-of-state retailer's testimony under oath. If the out-of-state retailer
fails or refuses to respond to the subpoena and give testimony, the
executive director may apply to any judge of the district court of the state
of Colorado for an attachment against the out-of-state retailer for
contempt.

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Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 39-26-102 (3) (b) and (8), Colorado Revised
Statutes, are amended to read:
39-26-102. Definitions. As used in this article, unless the context
otherwise requires:

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(3) "Doing business in this state" means the selling, leasing, or

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delivering in this state, or any activity in this state in connection with the

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selling, leasing, or delivering in this state, of tangible personal property

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by a retail sale as defined in this section, for use, storage, distribution, or

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consumption within this state. This term includes, but shall not be limited

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to, the following acts or methods of transacting business:

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(b) (I) The soliciting, either by direct representatives, indirect

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representatives, manufacturers' agents, or by distribution of catalogues or

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other advertising, or by use of any communication media, or by use of the

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newspaper, radio, or television advertising media, or by any other means

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whatsoever, of business from persons residing in this state and by reason

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thereof receiving orders from, or selling or leasing tangible personal
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Ex. 1

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property to, such persons residing in this state for use, consumption,

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distribution, and storage for use or consumption in this state.

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(II) (A) COMMENCING MARCH 1, 2010, IF A RETAILER ENTERS INTO

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AN AGREEMENT WITH AN AFFILIATE UNDER WHICH THE AFFILIATE, FOR A

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COMMISSION OR OTHER CONSIDERATION, DIRECTLY OR INDIRECTLY REFERS

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POTENTIAL CUSTOMERS, WHETHER BY A LINK ON AN INTERNET WEB SITE

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OR OTHERWISE, TO THE RETAILER, THEN THE AFFILIATE SHALL BE

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PRESUMED TO HAVE SOLICITED BUSINESS ON BEHALF OF SUCH RETAILER

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AND SUCH RETAILER IS DEEMED TO BE DOING BUSINESS IN THIS STATE .

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THIS PRESUMPTION SHALL NOT APPLY UNLESS THE CUMULATIVE GROSS

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RECEIPTS FROM SALES BY THE RETAILER TO CUSTOMERS IN THE STATE WHO

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ARE REFERRED TO THE RETAILER BY ALL AFFILIATES WITH THIS TYPE OF AN

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AGREEMENT WITH THE RETAILER ARE IN EXCESS OF TEN THOUSAND

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DOLLARS DURING THE PRECEDING CALENDAR YEAR.

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MAY BE REBUTTED BY PROOF THAT THE AFFILIATE WITH WHOM THE

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RETAILER HAS AN AGREEMENT DID NOT ENGAGE IN ANY SOLICITATION IN

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THIS STATE ON BEHALF OF THE RETAILER THAT WOULD SATISFY THE NEXUS

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REQUIREMENT OF THE

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CALENDAR YEAR IN QUESTION.

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SHALL BE CONSTRUED TO NARROW THE SCOPE OF ANY TERM FOR PURPOSES

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OF THIS ARTICLE.

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(B) FOR

UNITED STATES
NOTHING

THIS PRESUMPTION

CONSTITUTION DURING THE
IN THIS SUBPARAGRAPH

PURPOSES OF THIS SUBPARAGRAPH

(II)

(II), "AFFILIATE"

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MEANS A PERSON RESIDING IN THIS STATE THAT PUBLICLY, NOT INCLUDING

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ELECTRONICALLY, SOLICIT BUSINESS BY MEANS OF THEIR PHYSICAL

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PRESENCE IN THIS STATE.

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(8) "Retailer" or "vendor" means a person doing a retail business
IN THIS STATE,

known to the trade and public as such, and selling to the

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user or consumer, and not for resale.
SECTION 2. 39-21-112, Colorado Revised Statutes, is amended
BY THE ADDITION OF A NEW SUBSECTION to read:
39-21-112.

Duties and powers of executive director.

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(3.5) (a) IF

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FURNISH ANY OF THE INFORMATION SPECIFIED IN SUBSECTION (1) OF THIS

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SECTION WHEN REQUESTED BY THE EXECUTIVE DIRECTOR OF THE

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DEPARTMENT OF REVENUE OR HIS OR HER EMPLOYEE, AGENT, OR

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REPRESENTATIVE, THE EXECUTIVE DIRECTOR, BY SUBPOENA ISSUED UNDER

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THE EXECUTIVE DIRECTOR'S HAND, MAY REQUIRE THE ATTENDANCE OF

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THE OUT-OF-STATE RETAILER AND THE PRODUCTION BY HIM OR HER OF

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ANY OF THE FOREGOING INFORMATION IN THE OUT-OF-STATE RETAILER'S

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POSSESSION AND MAY ADMINISTER AN OATH TO HIM OR HER AND TAKE HIS

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OR HER TESTIMONY. IF THE OUT-OF-STATE RETAILER FAILS OR REFUSES TO

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RESPOND TO SAID SUBPOENA AND GIVE TESTIMONY, THE EXECUTIVE

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DIRECTOR MAY APPLY TO ANY JUDGE OF THE DISTRICT COURT OF THE

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STATE OF COLORADO TO ENFORCE SUCH SUBPOENA BY ANY APPROPRIATE

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ORDER, INCLUDING, IF APPROPRIATE, AN ATTACHMENT AGAINST THE

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OUT-OF-STATE RETAILER AS FOR CONTEMPT, AND UPON HEARING, SAID

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JUDGE HAS, FOR THE PURPOSE OF ENFORCING OBEDIENCE TO THE

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REQUIREMENTS OF SAID SUBPOENA, POWER TO MAKE SUCH ORDER AS, IN

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HIS OR HER DISCRETION, HE OR SHE DEEMS CONSISTENT WITH THE LAW FOR

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PUNISHMENT OF CONTEMPTS.

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ANY OUT-OF-STATE RETAILER REFUSES VOLUNTARILY TO

(b) FOR PURPOSES OF THIS SUBSECTION (3.5), "RETAILER" SHALL
HAVE THE SAME MEANING AS SET FORTH IN SECTION 39-26-102 (8).

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SECTION 3. Part 1 of article 21 of title 39, Colorado Revised

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Statutes, is amended BY THE ADDITION OF A NEW SECTION to

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read:

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39-21-122. Revenue impact of 2010 tax legislation - tracking

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by department. THE DEPARTMENT OF REVENUE SHALL ACCOUNT FOR ALL

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REVENUE ATTRIBUTABLE TO THE ENACTMENT OF

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ENACTED IN

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AVAILABLE, MAKE QUARTERLY REPORTS TO THE GENERAL ASSEMBLY

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REGARDING THE QUARTERLY AND CUMULATIVE NET REVENUE GAIN TO THE

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STATE RESULTING FROM THE ENACTMENT OF SAID BILL.

2010,

HOUSE BILL 10-1193,

AND SHALL, TO THE EXTENT SUCH INFORMATION IS

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SECTION 4. Part 1 of article 75 of title 24, Colorado Revised

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Statutes, is amended BY THE ADDITION OF A NEW SECTION to

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read:

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24-75-113. 2010 bills to increase state revenue - prohibition on

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hiring of new state employees. NO

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INCREASE IN STATE REVENUES RESULTING FROM THE PASSAGE OF HOUSE

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BILL 10-1193,

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PURPOSE OF FUNDING ADDITIONAL FULL TIME EQUIVALENT STATE

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EMPLOYEES.

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ENACTED IN

SECTION 5.

2010,

MONEYS DERIVED FROM THE

SHALL BE APPROPRIATED FOR THE

Appropriation.

In addition to any other

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appropriation, there is hereby appropriated, out of any moneys in the

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general fund not otherwise appropriated, to the department of revenue, for

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allocation to the taxation business group, taxation and compliance

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division, for the fiscal year beginning July 1, 2009, the sum of ninety-four

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thousand three hundred twenty-two dollars ($94,322) and 0.9 FTE, or so

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much thereof as may be necessary, for the implementation of this act.

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SECTION 6. Safety clause. The general assembly hereby finds,

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determines, and declares that this act is necessary for the immediate

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preservation of the public peace, health, and safety.

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Ex. 1