May 11, 2011 09:21 PM UTC

Time's Up For So-Called "Amazon Tax" Repeal

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• by: Colorado Pols

After watching legislation from GOP Majority Leader Amy Stephens to repeal Colorado’s misnamed “Amazon Tax” law pass the House last week with little debate and many Democrats on board, today’s report from the Durango Herald’s Joe Hanel really has us smiliing.

Senate Democrats declined to consider a repeal of the “Amazon tax” on Internet sales Tuesday, killing the bill for the year.

House Bill 1318 would undo last year’s state law about taxes on Internet purchases – a law that is currently blocked by a federal judge…

It passed the House 58-6 last Thursday, but Senate leaders did not schedule it in time to pass before today’s deadline for the legislative session to end.

“We’re obviously focused on trying to get this redistricting thing done and a couple other major priority bills,” said Senate President Brandon Shaffer, D-Longmont.

The sponsor, House Majority Leader Amy Stephens, was livid…

In addition to the wide margin with which HB-1318 passed the House, it was, as we said last Friday, particularly distressing to see Democrats like Rep. Sue Schafer mindlessly repeating discredited talking points about the “effect” of last year’s law: as we’ve recounted over and over, the “Amazon Tax” was carefully written to advance the issue of online sales tax collection as far as it could and still comport with federal law. The “loss” of “thousands of jobs” attributed to this law by Republicans, and more recently Democrats like Schafer, is unusually pure nonsense–ridiculously counting ads displayed on websites, and “incomes” even from relatively successful affiliates of a few dollars a month, as “jobs.” Above all, Amazon terminated these agreements out of pure spite, not any actual impact of the law. It was a punitive and trifling retaliation, then blown very deliberately out of proportion.

But it’s clear some persuasive lobbyists got their hooks into the House on a bipartisan basis.

The thing is, Colorado’s fight to collect the use tax state law has always said is owed on online purchases isn’t happening in a vacuum. Many states are presently at war with Amazon over a variety of attempts to induce them and other online merchants to collect and remit (or at least facilitate the collection of) sales tax, and Amazon has shown itself capable of hard-nosed, political retaliation in each case. Whether or not the approach followed by the Colorado legislature in 2010 proves workable in court is one valid question, but in our opinion, another much more important question is whether states like ours will continue to be bullied by a massive out-of-state corporation–who wants to sell their product here, but doesn’t care about the local communities their tax-free sales are starving of revenue, or the local businesses they put out of business with their preferential tax advantage. While the ultimate solution may be federal, intimidated states caving to retaliation, and groveling piecemeal, won’t help.

Like we said when Rep. Stephens first announced this legislation, claiming she was doing it to ‘show Colorado is a good place to do business,’ for whom? Businesses who are actually on the ground in Colorado, creating jobs and paying taxes–members of the Colorado Retail Council who supported last year’s bill–or a giant online merchant who will never set foot here?

The record will show before the long, national battle over online sales and local taxes is over: Rep. Stephens, and others who supported this bill, including Democrats who got suckered and co-opted by Amazon against true “Colorado business,” were not really on Colorado’s side at all.