CO-04 (Special Election)
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(R) Greg Lopez
(R) Trisha Calvarese
90%
10%
President (To Win Colorado)
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(D) Joe Biden*
(R) Donald Trump
80%
20%↓
CO-01 (Denver)
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(D) Diana DeGette*
90%
CO-02 (Boulder-ish)
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(D) Joe Neguse*
90%
CO-03 (West & Southern CO)
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(D) Adam Frisch
(R) Jeff Hurd
(R) Ron Hanks
40%
30%
20%
CO-04 (Northeast-ish Colorado)
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(R) Lauren Boebert
(R) Deborah Flora
(R) J. Sonnenberg
30%↑
15%↑
10%↓
CO-05 (Colorado Springs)
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(R) Dave Williams
(R) Jeff Crank
50%↓
50%↑
CO-06 (Aurora)
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(D) Jason Crow*
90%
CO-07 (Jefferson County)
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(D) Brittany Pettersen
85%↑
CO-08 (Northern Colo.)
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(D) Yadira Caraveo
(R) Gabe Evans
(R) Janak Joshi
60%↑
35%↓
30%↑
State Senate Majority
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DEMOCRATS
REPUBLICANS
80%
20%
State House Majority
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DEMOCRATS
REPUBLICANS
95%
5%
January 28, 2011 11:02 PM UTC
45 Comments
as far as taxes are concerned, would be more fair. Internet business has the advantage in so many other areas, I don’t believe it would hurt them or cost jobs. Brick and mortar already has to compete with completely sedentary (America’s favorite kind of anything) shopping in pjs. They shouldn’t have to compete in the area of taxes too. I for one want to have the continuing option of going out to brick and mortars and, you know, being with living breathing fellow humans once in a while. Who have jobs in my community.
This is a difficult and complicated issue, but Hick taking a stand shows that he has some guts. Glad to see that he isn’t willing to back down for large out of state corporations, like others in the GA.
Maybe this tax won’t be effective, but at least stand up for what is right.
The Ultimate Electronics bankruptcy story today prompted me to post this in the Open Line Friday:
“Today’s report on Ultimate Electronics Chapter 11 bankruptcy filing (they have 9 stores in CO) got me thinking — How does any brick and mortar store survive in today’s internet environment?
Here is how I shop for big ticket items: 1) I peruse the internet to determine the consensus best quality item; 2) I go to Ultimate Electronics or some other store in the area to see the item and pick the salesman’s brain; 3) I return to the internet to purchase the item at the lowest cost. The lowest cost invariably is the internet because of frequently free shipping and no sales taxes. How can a brick and mortar store compete with that? I guess I should be paying use tax on those purchases, but I don’t know how to do that, and don’t want to find out. (This is an anonymous posting, right?)
I’m shocked that the states and localities in the US have not yet figured out how to require sales taxes to be collected on all internet purchases.”
Anyone know why some internet sites collect sales tax and others don’t? The lost sales taxes to CO and CO localities on internet sales have to be huge.
To collect sales tax you are supposed to have economic nexus within the state. If a company has a brick and mortar store in CO, anything you buy online from them has sales tax (JCPenney, Target). Amazon, not so much, which is what this law was trying to get around.
Most B&M stores now have price matching policies. So if you peruse the internet for the lowest price, then take that price into Best Buy or Ultimate Electronics and ask them to match it. 98% of the time they will. Heck, some will even go 10% lower than the price you brought in.
Not all stores do this but most do. If they want to continue to thrive in this market, the stores that don’t price match should start adopting those policies.
When I worked in retail, I had a computer on the sales floor and if one of my clients ever brought up price, i went straight to that computer, plugged the Manufactures item # into google and found the cheapest price. Now they have iphone aps for that.
Sure it cut into my commision a little, (which is easy to make up for with little add ons if you rocked it like I did 😉 ) but I’d rather have a smaller sale than no sale at all.
At the end of the day, while shopping online is convienent, most ‘consumers’ do like to see what they get. Shopping locally does have a certain tangability that the online world just can’t compete with. People like walking out of a store with items in hand because it gives them that shoppers high/mission accomplished/immediate satisfaction that a click of the computer mouse just doesn’t give. It’s also easier to return items to a store, get proffesional feedback on quality of products, personal service, finding something unexpected on clearance etc etc…
B&M DO have competetive advantages, they just need to tap into them.
Hick owned a local business. You can’t get the bar experience online, but you can sure buy microbrewed beer. Amazon’s unfair advantage hurt businesses like Hick’s own.
Colorado consumers who shop online.
Please note that I wrote “consumers” and not citizens or voters or people who live in Colorado.
It hardly affects their costs at all, actually. It still leaves physical retailers at a distinct disadvantage. The people hurt by this were the Amazon “affiliates”, people that got a check for 2 to 5 dollars every now and then for linking from their web sites to Amazon’s. I’m not sure many of them cared either. For some, it was probably a bit of a relief, anyway, to at least know their failed attempt at a bit of pocket cash was over.
…that the Elephants don’t want to talk about is taxes.
That’s what all this is really about, don’t you think? Not jobs or how much business a business does. Just about how much (desperately needed) tax money Colorado can get.
While there are certainly cases where people buy something online instead of in a bricks and mortar store because it is cheaper, I think it’s much more common that people shop online because it’s easier, and there is a much broader selection.
I for one would approve of there being a nationally implemented sales tax on goods bought on the internet. If it was the same for everyone everywhere, and it was distributed in an even-handed way, that would be fair.
But I’m pretty sure that even if a tax law like that was established, you would still see a large chunk of overall sales happening through the internet, because of the choice and convenience factor.
It’s kind of sad that we can’t just say, “Hey, let’s make this sales tax thing more efficient and fair, because it’s to the benefit of everyone.” Nope, can’t say good things about taxes! Too many heads will explode, and then who’ll clean up the mess?
I agree the court should repeal this particular law, because it was poorly thought out, and seemed to me to be a lazy grab for what looked like big bucks from Amazon. I mean, what about eBay and all the other big dogs in the online biz? You can’t really blame Amazon for fighting back when they get singled out.
In closing, just to muddy the waters further, I’ll share something about my own teeny tiny bookstore in my teeny tiny town of Lamar. I order 5-10 books a week for people here…mostly from Amazon (and yes, I collect state and local sales tax. I also collect state and local sales tax when people in Colorado buy from me online.) We mainly sell used books, starting at 50 cents each, because we want to make reading as affordable as possible.
Maybe it’s because of our low prices, but our sales through Amazon are approximately 1 1/2 times more than our in-store sales. So this one business right here needs BOTH venues to make enough profit so that continuing to do what we’re doing is a sensible use of our time and resources.
Amazon wasn’t singled out. They’re just the most prominent online retailer that doesn’t collect sales tax for Colorado residents.
This problem cannot be solved at a state level, as it is just not practical for small retailers to have to purchase tax licenses in 50 states. if I had to do that, I would be out of business in a heartbeat. Large retailers like Amazon could absorb that cost of business fairly easily, so the tax is regressive in nature and puts an unfair burden on very small niche retailers.
As an on-line retailer, I already collect tax for sales made within Colorado. If I purchase something on line from out of state, Colorado already has a “Use tax” where I am supposed to self-declare those items and pay the appropriate sales tax. You are too, incidentally. If you have purchased something on line and have not paid your use tax, you are a tax scofflaw. Certainly, the “use tax” in next to completely unenforceable, so I understand why the state wants the Amazon tax. But there are too many problems with the Amazon tax. Primarily, it is anti small business.
I think a more practical solution would be for on-line retailers from out of state to be required to simply report individual sales within the state and let the state figure out how to bill and collect from the individuals for the use tax they owe.
There’s a certain amount of overhead involved both for the states and the retailers in applying for a sales license, especially when as a small seller you may very well not even sell anything in a particular state in a particular year. The states might lose out on a bit of paperwork revenue, but I don’t think most of us would cry over that.
I would even go for making this a Federally controlled reporting system. You report sales to the IRS and break out your sales among the states; the IRS forwards your tax info to the state DoRs, who then send you a tax bill.
That’s all this bill does, sir.
First off, you have to figure out what tax district(s) the sale is in. Then you have to find out if the sale you make is taxable in those districts. You will get different answers at times from the city & state. And sometimes the answer is they don’t know if it’s taxable.
And this is if you don’t collect. The state wants online retailers to collect and that makes it even more complicated with reporting to each taxing authority.
The present situation is a killer for small internet businesses. They have to ignore this because following it would put them out of business.
“If known by the retailer,” and only whether it is taxable or not. You are being ridiculous about this as always because your sacred cow is being skewered. Some liberal you are. Please read the actual very non onerous law and stop freaking out.
http://www.leg.state.co.us/cli…
We sell annual “support & updates” for our software. You cannot buy just support or just updates – we only sell it together. Support is a service (not taxable) and updates is a product (taxable). Some of our customers are on very old versions so they clearly only use the support part.
Is it taxable? DoR doesn’t know.
Read Regulation 39-26-102.13(2)(a) and (b), along with Colo. Rev. Stat 39-26-102(13.5) and 39-26-102(15)(b)(I), which specifically address your question.
I did Google searches on these and could not find anything that discusses selling annual support & updates. This is not selling the original software, this is annual maintenance – a very different thing.
So link? Because otherwise you’re just blowing smoke out your ass.
you may be too incompetent to be running a software business, because I just googled
“Regulation 39-26-102.13(2)(a)” and “Colo. Rev. Stat 39-26-102(13.5)” and found the text of the regulation and the statute.
So am I blowing smoke out my ass? Or are you just a jerk?
I’ll agree I’m a jerk if you’ll admit you’re blowing smoke out your ass on this issue.
And if it’s so easy to find the regulation that does clarify the above question – why no link? My guess is because there is no regulation that clarifies it…
You say you can’t find it–but there it is. Moron.
Now you want a self-explanatory regulation explained to you? Moron.
You’ve tried to ride this horse long enough. Now shut the fuck up and admit you’re a clueless twit.
No info to back up what you claim but instead you just yell louder that you’re right. Again, if it’s so easy to find – provide a link.
You’ve been screeching about this for months. You said you googled it and couldn’t find it. That makes you a liar.
with the heading “maintenance agreements.”
Or is that too subtle for you?
Interesting that you could have provided a link all along but chose not to. And yes, previously what I would get in the search results was listings of notices to comment on the proposed law and articles about the law. But hey, now I have it.
And it says:
We don’t have a separate charge for the software (upgrades) vs support (see http://www.colorado.gov/cs/Sat… So it comes back to – what do we do with this combined product. Keep in mind about half our customers do not upgrade their software so their purchase in terms of use is 100% support (not taxable).
As to your replying back multiple times declining to provide me a link and instead calling me names – is that because you’re a pretentious, self-righteous, pompous ass? You must be a real thrill to negotiate with at the Capitol.
The policy has evolved over the decades, as seems appropriate since the industry has also evolved. There are clear criteria for considering software a taxable good, as opposed to a service, and it doesn’t sound like your upgrades qualify.
http://www.cobar.org/repositor…
Second, our customers may be due a sales tax refund. We’re electronic delivery and it exempts electronic delivered software. I’ll have our operations person ask our accountants about that on Monday.
Also our license agreement is negotiable. We’ve made little changes for various companies when asked.
ps – What we’ve been doing is telling our Colorado customers (fortunately we have very few) that it’s unclear but the safe thing is to pay on everything – and they have.
You might want to consider consulting an accountant or attorney who specializes in sales tax issues, or at least review the statute first:
“Tangible personal property” includes standardized software without regard to how such standardized software is acquired by the purchaser or downloaded to the purchaser’s computer.”
The statute and regulations provide clear exemptions for maintenance agreements. Assuming you don’t want to be put at a competitive disadvantage by in-state vendors who are smart enough to figure out how to ensure their customers are not overpaying, or out-of-state vendors who aren’t collecting sales tax at all, consult an accountant or attorney who is up-to-date on the current rules.
And first let me thank the legislature for adding this cost to doing business. Why without this, Colorado businesses would have wasted the money spent on the advice hiring additional employees. Well done.
And the answer we got – that it’s unclear if our annual maintenance is taxable so better to be safe and collect it. (Our maintenance is probably more accurately defined as support & updates.)
ps – The competitive disadvantage is not the money – our customers are price insensitive for our product. The competitive advantage for out of state vendors is they don’t have the hassle of interactive with DoR.
It does not–repeat–does not–require out-of-state retailers to collect sales taxes.
It requires retailers who do not collect Colorado sales tax to (1) provide a notice to Colorado purchasers that their purchases may be subject to use tax and (2) provide an annual report to the DOR. That’s it. They don’t have to know tax rates, whether their sales are taxable (unless they know an item is actually taxable), or anything else other than that a shipment was made to a Colorado address.
If I sell to a company in Colorado and the software is then downloaded by their developers in China – do I include it. They never touched it in Colorado, but our server they downloaded from is in Colorado.
Or what about when we sell to someone in Poland, but they have a developer in Colorado who downloaded and used the software. Do we need to contact every customer and ask them to investigate the location of everyone using the software they purchased?
This is the core problem – the people who wrote this legislation have no idea how the world actually works today. But hey, the state needs the money and who cares that it put onerous job killing and company killing requirements on businesses.
Deja vu or daiquiri?
have to do with the Amazon law?
The question is what sales do we report?
is not a part of the Amazon law.
I had a division of a multi-national in Poland purchase from us. Do I send them a letter?
Turns out they have a developer in Colorado so one part of the program would be taxable here. So yes – because we tracked it down.
But all the other companies we sell to with nothing in Colorado – do I send them letters? No because they have nothing here.
You clearly have no idea how digital good are purchased & deployed. But you get all high & mighty about how this is so easy to comply with. You’re clueless on this issue.
And in your cluelessness, you piss off a ton of business owners. When you see business owners turning to the Republican party and wonder why – look in the mirror.
The “Amazon tax” is nothing more than the use tax. All this is is a requirement that online retailers provide a list of purchases so that the already existing use tax can be paid.
When the state sees that you bought every one of Sarah Palin’s books?
Please read the law. You’re just being silly, the state only receives a dollar total.
I bought a $10 piece of threaded rod from McMaster-Carr earlier this year. Yesterday I got a letter from them marked “Important tax information enclosed.” It was a statement of my online purchase.
Now if I could just figure out where to pay the tax…
It is pro B&M business. It is anti online business, including Colorado businesses. This is a case where one of these two groups is hurt and the other helped depending on which way the bill goes.
The situation is extraordinarily bad in Colorado specifically for two reasons. First you have 89+ taxing districts. So finding what district a sale is in, and what is taxable in that district is significant work. (The what is taxable is really killer.)
Second we have a totally inept Depart of Revenue (which Hick decided to double down on with keeping Roxy Huber in charge there). When you ask if something is taxable, over half the time the answer we get is they don’t know. Makes it hard to determine when to report/collect a tax.
Here’s the thing – it’s not the money, it’s the hassle that’s killer. If the bill is enforced B&M gain advantage as online companies face giant compliance costs. If the Amazon bill is killed the B&M companies lose because they face a (lesser) compliance cost the online companies don’t face.
There are two solutions that don’t damage either business and don’t suppress job growth.
1. Eliminate sales tax and instead increase income & property tax. And add a carbon tax (good replacement for the business property tax because of who both hit).
2. Make the only sales tax state wide at a single rate, reported & paid to a single entity. And have the tax be on every good and service sold – no exception by product, use, anything.
If the state is truly interested in supporting all business, promoting job growth, and getting the income they need – they’ll address this right.
On the flip side if they only care about their income and scoring political points with their primary financial supporters, they’ll continue with the present sales tax discombobulated mess.
Any bets as to what matters to them?
like they did with cell phones. Prior to the Mobile Telecommunications Sourcing Act (4 USC 116 et seq) the taxation of cells phones was a mess. Because some states said the point of taxability was the first tower the signal hit and some said it was the first relay and some said the point of origin and other said the address of the phone user some calls were getting taxed multiple times. The industry and the states went to congress with a request for congress to say that the only place a cell phone could be taxed was at the users home address. (That’s a bit of an over simplification but that’s what it works out to for most everyone.)
A significant number of states are pushing the streamline sales tax to not only simplify but the ultimate goal is to convince congress to allow the several states to go after the online folks and force collection of sales tax. Every state that has a sales tax (except Colorado) is involved in some way. When California, New York or Texas joins I think that will be the tipping point and congress will act.
Knowing our luck congress will probably mandate that a state needs to be a fully compliant member to be allowed to tax online vendors. In Quill Corp. v. North Dakota, 504 US 298 (1992) the court left the door wide open for congress to let the states go after companies without physical nexus.
Why isn’t Colorado involved? TABOR. Can you see trying to place a completely revised sales and use tax statutes on the ballot? That would be fun.
Wouldn’t it make sense to pay sales tax in the state where the sale was made, rather than expect a seller to know and try to collect and pay taxes based on the location of the purchaser?
That depends. In a free market economy where businesses are constantly trying to minimize costs, retail businesses would try to locate in places with no sales tax, just as they all began to incorporate in Delaware after JP Morgan got the states to compete for the title of Best Corporate Haven.