The U.S. Supreme Court let stand a Colorado law that imposesreporting requirements on internet retailers in an effort to getcustomers to pay the sales taxes they owe.

On Monday, the justices turned away an appeal by aretail-industry trade group that challenged the measure as violating the U.S.Constitution.

The case raised questions about a 1992 Supreme Court ruling thatbars states from requiring merchants to collect taxes unless theyhave a physical presence in the state. States lose $23 billionevery year in uncollected sales taxes from web and catalogpurchases, according to a 2012 estimate by the National Conferenceof State Legislatures, the most recent figures available.

Although consumers are supposed to pay the taxes themselves, fewdo unless the seller collects the money.

The Colorado law requires internet retailers to turn overcustomers' names, addresses and purchase amounts to taxauthorities. Merchants also must notify consumers of theirobligation to pay taxes and provide a purchase summary to peoplewho spend more than $500 in a year.

The Direct Marketing Association contended unsuccessfully thatthe law violates the Constitution's commerce clause because itapplies solely to out-of-state companies.

Colorado officials urged the Supreme Court not to hear the case.The state told the justices that, if they wanted to intervene, theyshould also consider overruling the 1992 ruling, which Coloradosays no longer makes sense given the growth of internetretailing.

The case is a familiar one to the justices, who ruled on apreliminary question in 2015. In that decision, Justice AnthonyKennedy wrote a separate opinion to say that the court should atsome point revisit the 1992 case.

The cases are Direct Marketing Association v. Brohl, 16-267, andBrohl v. Direct Marketing Association, 16-458.

Bloomberg News

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