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March 08, 2010 11:12 PM UTC

A Lesson To The Others

  • 141 Comments
  • by: Colorado Pols

UPDATE #2: Don’t get mad, send emails! Click here to contact Amazon.com and then select the “email” tab.

—–

UPDATE: Video response from Sen. John Morse after the jump.

—–

Local participants in the Amazon.com Associates Program woke up this morning to an interesting and, we have little doubt, most upsetting email:

Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way…

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill.

As you probably already realize, this is not about any actual hardship involved in the collection of a small percentage in sales tax or generating reports on sales, which Amazon is fully equipped to do–and already does where required. Colorado, as you’re aware, is just one of an overwhelming majority of states experiencing crippling budget shortfalls in the present economic downturn. Online retail sales have skirted most state and local sales taxes ever since the industry’s inception, and have now grown to the point where not only is that advantage no longer necessary, but online retail sales are flourishing while traditional brick-and-mortar retailers go out of business.

Bottom line: this is about exacting a punitive political toll on elected officials in Colorado who voted to enforce collection of tax on online purchases, and a deterrent to other states who may be considering similar action. If we were an ex-Amazon Associate, we’d be taking a longer view: do you like being a pawn for Amazon.com’s leg up on your corner bookstore? Exactly how long does the online retail sales industry need a competitive advantage over local business? Should states leave revenue on the table while their own retail economies decline?

You’re not supposed to be thinking about any of that, of course. You’re just supposed to get mad.



(h/t shrubhugger)

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141 thoughts on “A Lesson To The Others”

      1. analysis that Amazon.com was “exacting a punitive political toll” and sending a message to “other states who may be considering similar action.”

        I thought that sounded like labor union tactics, which are frequently championed on this site.

        1. I love to break it to you but unions (from the most basic sense of people uniting to IWW and beyond) is the only thing that combat something like this.

          You see, if you have something they want (and sweet baby, you do) corporations will rape you until you die or until you stand up to them—whichever comes first. If you think corporations are victims of things like people trying to get a living wage and expensive stuff like that, then I guess that’s where we disagree about who to root for.

          Thanks for playing.  

            1. you have no argument to make, just a couple of basic opinions that you learned from others and can’t support when challenged.

              Thanks for being here though. People who can’t justify their beliefs need representation too.

        2. If I were a factory employee, a workman on the railroads or a wage-earner of any sort, I would undoubtedly join the union of my trade. If I disapproved of its policy, I would join in order to fight that policy; if the union leaders were dishonest, I would join in order to put them out. I believe in the union and I believe that all men who are benefited by the union are morally bound to help to the extent of their power in the common interests advanced by the union.

  2. Amazon’s Associates are victims of Amazon’s political agenda. They did this because they could.

    I have a family member affected by this who is very upset. I’m trying to explain to her who is to blame, it’s not easy.

  3. the people of Colorado should respond to Amazon’s attempt to circumvent the will of Colorado in pursuit of its own interests by buying from Amazon’s competitors rather than from Amazon. It’s easy and potentially effective. Amazon wants to punish our representatives for acting in their constituents’, rather than Amazon’s, interests? Let’s punish Amazon instead.

  4. If we were an ex-Amazon Associate, we’d be taking a longer view: do you like being a pawn for Amazon.com’s leg up on your corner bookstore? Exactly how long does the online retail sales industry need a competitive advantage over local business? Should states leave revenue on the table while their own retail economies decline?

    You’re not supposed to be thinking about any of that, of course. You’re just supposed to get mad.

    All this says is “if you do anything to legislate against our mission to monopolize the market, we will act out and won’t take responsibility.”

    Amazon would rather see further cuts to education than to collect a measly 2.9% sales tax. Fuck you, Amazon. Fuck you hard.  

          1. Not that losing me as a customer will put them out of business, but I was able to cancel my account with a little note saying why, with a link to this site!

            1. I think that the whole discussion below is largely superfluous. The real issue here is that Amazon is thumbing its nose at Colorado, and Colorado should thumb its nose back at Amazon in return. I think that Amazon suffers more by losing every Colorado customer who finds their actions offensive than offended Colorado customers lose by having to shop elsewhere.

            2. And I let them know that when they were ready to stop screwing over their customers and affiliates, and start playing on an even playing field with physical retailers who pay tax, I would be happy to create a new account.

    2. let’s go to our locally owned bookstores, which employ local people, pay local taxes, and serve a local clientelle. If they don’t have what you’re looking for, they can order it. It’s so much nicer to walk among those stacks of books, and feel their presence all around you, and smell them and touch them and see others doing the same. Get out and enjoy some fresh air, and buy your books from local vendors!

      1. take Kindle for example. I don’t have one because they seem weird but a lot of people do. Is there an alternative to Amazon for purchasing your readable soft-core porn?

        On a similar, harmonic note, I was browsing the largest companies and AT&T is in the top ten. They drop so many calls! How is that the free-market playing out?

        Thank you, proprietary software. Thank you hard.  

        1. (But without the AT&T service. And right now, since Apple has real, brick-and-mortar stores in Colorado that employ real people, they do collect the sales tax that Amazon apparently finds so incredibly hard to do.)

        2. You don’t always have to fuck her hard

          In fact sometimes that’s not right to do

          Sometimes you’ve got to make some love

          And fucking give her some smoochies too

  5. when they refused to stop selling instructional books on dog-fighting (a criminal activity, by the way). They actually went to court to defend their right to sell them saying it was a free speech issue. Maybe that is true, but the fact that they wanted to sell them at all makes them gutter-dwelling slimebags in my book.

    1. My reasons were not nearly so noble, and only apply to Amazon in America.

      I wrote a book last year about the Russian imperial family and has become of the descendants of the survivors of the Revolution.

      Amazon in America has yet to add this book to their listings even though it is now available through Germany’s, UK’s, Australia’s, and Japan’s versions of Amazon.

      So if Amazon.com (the American variety) won’t sell my book, why should I buy theirs?

  6. And they have on-line services available.

    If that doesn’t work (and it usually does) I also have B&N and Borders 10-15 minutes away.  (Their coffee shops are a great place to meet friends.)

      1. ah, how I love ’em! I always wanted to open up a “Bohemian Book Store Cafe,” with lots of comfy chairs and cool exotic decor, even before such things started popping up. I love those places!

        One of my favorites is The Winding Stair in Dublin, overlooking the River Liffy and the Half Penny Bridge (a walking bridge), with the smell of burning malt always wafting down from St. James Place….

          1. I used to order from Abe books all the time, back in the day, when I had money. They carried a ton of books that were hard to find anywhere else.

            1. That’s what booksellers call Amazon, ABE and Alibris, which are the three main online sellers (that don’t have physical (B&M) stores). Some sellers hate the whole idea and won’t deal with any of them. Most who are with ABE and Alibris stick with them but complain about all the new changes and rules which tend to not be to the third party sellers’ benefit. (Go figure.)

              See, ABE isn’t just one giant book warehouse, it (like the other two As and some other co-ops) are businesses that facilitate sales for many small member sellers.

              I used to sell through ABE, but they charged more and produced many less sales, and then went to a fee-per-month charge that you paid whether you sold anything through them or not. So I quit ’em.

              What’s funny is that a lot of book dealers don’t want to work through Amazon because Amazon is too hard core in favor of its customers! They have regularly come up with new requirements for dealers to make sure customers are not getting cheated (which is one reason eBay is losing market share to them). To me they are worth dealing through because there are a TON of bookbuyers out there who ONLY trust Amazon, and the sales they produce for us are worth the extra hassle.

                1. Their are other book sites out there.  I would encourage anyone to check out Biblio.com and Choosebooks.com, Biblio.com is headquartered in North Carolina and Choosebooks in New York.  Both North Carolina and New York have also recently passed laws that are similar to the Colorado law.  Why is Amazon entitled to the enormous competitive advantage of not collecting taxes?  I am quite certain that they will use ABE books (based in Canada and whom they purchased) to thwart tax collection if the states are successful in making them play on a level field.  Support your local bookstore! Boycott the Beast!

                  1. Both Biblio and ChooseBooks are also co-op sites, so the tax question is just as fuzzy.

                    A good general search site for books, which I often use to get an idea of a fair price for an out of print title, is bookfinder.com  They were bought by ABE before ABE was bought by Amazon, but there is no charge to use them and they still bring up a plethora of sites, including the two mentioned above, where you will be buying from an individual seller (who is paying a percentage back to Biblio or ChooseBooks or whoever they deal through. If that matters to you).

                2. And here I was going to buy a rare book via ABE without knowing the company was owned by Amazon.

                  Now, I think I’m still going to buy the book — but at least I know the facts!

  7. If it’s that burdensome for them to collect sales tax, why don’t they just stop selling to Colorado residents altogether? Now THAT would cause some anger and at least make some sense.

    But they’re just punishing Associates – not because it’s particularly burdensome for them to keep their Colorado Associates, but just because they’ve coldly calculated that the revenue they’ll lose from dropping their Associates will be less than the ransom value of the Associates.

    It’s blackmail, pure and simple. No rational cause-and-effect connection. Way to go Amazon.

      1. I saw how many of them turned out for the Finance Cmte hearings and they all blamed govt, not Amazon. The few I spoke to about “well, isn’t the onus on Amazon? Aren’t they threatening you?” and the response was basically well yeah, but we can’t take them on. They’re too big.  

  9. When I woke up I found half a dozen people had angry and/or upset Facebook status updates about this.  But let’s be honest…your assessment of WHY Amazon did this is right on–they don’t want other states following suit.  And as much as I shop online, and at Amazon.com in particular, the lack of a sales tax is simply a competitive edge for OUT OF STATE businesses like Amazon.  They collect OUR money, pay income taxes in their home state, and we get our goods on the cheap while some local businesses suffer for it.

    So, personally, this sucks.  But then again, I do virtually 100% of my Christmas shopping on Amazon.com, in addition to most of my shopping year-round.  But it only makes sense for the state and for local businesses.

    Son of a bitch, I’m gonna regret saying that.

    1. Sales tax sux.

      It’s expensive to collect, it’s regressive, and it discourages consumption.

      Rather than expand sales tax, let’s eliminate it.

      In it’s place, progressive income tax.

    2. This is why I like you, BR, even if you call us names.

      I just went to the Boulder Bookstore to order two out-of-stock books. I could get them on Amazon more quickly, but it’s about the same price, and shit like this reminds me how important it is to shop locally. It can be easy to forget.

      Plus if I stop buying stuff from Amazon, it’ll be easier to escape David’s use tax wrath.

  10. FOR IMMEDIATE RELEASE

    Monday, March 8, 2010

    CONTACT: Bobby Clark, Deputy Director at 303-905-8375

    DENVER: Responding to news that the online retailer Amazon.com has terminated relationships with business affiliates in Colorado in protest of a new state law, ProgressNow Colorado, the state’s largest online progressive advocacy organization released the following statement:

    “After profiting from millions of dollars in direct sales to Colorado residents for years, Amazon is determined to protect their unfair advantage over local brick-and-mortar retailers,” said ProgressNow Colorado Executive Director Bobby Clark. “This year, the Colorado legislature passed a law to enforce collection of taxes for online purchases, leveling the playing field between massive online merchants like Amazon and local retailers who pay their taxes and employ Coloradans.

    “Rather than comply with the law as Amazon already does in many other localities where they collect sales tax on purchases, they chose to ‘make an example’ of our state, and unfairly punish their own business associates for political gain. Amazon clearly expects Coloradans to react hastily and in anger, but our state’s citizens understand who is manipulating the situation for their own financial and political benefit.

    “Local companies like the Tattered Cover Bookstore and Ultimate Electronics, who employ thousands of Colorado residents and pay their sales taxes back into the community, have suffered greatly while Amazon profited from an unfair advantage. With millions of dollars in badly-needed revenue set to make its way into the budgets for Colorado’s schools, roads, and health care, standing behind Main Street over online behemoths like Amazon is an easy choice.”

    ###

  11. The Senate sponsor of the bill had some choice words for Amazon this afternoon:

    “This bill is about fairness and creating an equal playing field for every business that does business in Colorado.  The legislature went to great pains to protect local affiliates- and removed all mention of affiliates at their request, and with their support-and Amazon knows full well as a result that House Bill 10-1193 as amended has nothing to do with affiliates.  Now, Amazon is firing innocent people to make a point. In an effort to lock in a massive corporate tax subsidy that tilts the playing field in its favor, this multi-billion dollar corporation has decided to throw its weight around by firing its small, Colorado-based affiliates.

    “This is reprehensible corporate bullying by a big business that doesn’t want to play by the same rules as everyone else. At a time when the American people are disgusted with corporate greed and excess, Amazon couldn’t be more selfish.  Even as states and local retailers suffer in the depths of recession, Amazon has seen skyrocketing profits in recent years, with net income of $190 million in 2006, $476 million in 2007, $645 million in 2008, and $902 million in 2009.

    “Compliance with the bill is not difficult and there are many examples of good businesses like Barnes and Noble and Lands End who collect and remit Colorado sales tax.  Amazon’s slashing of its ties with Colorado affiliates should be seen for what it is: an attempt to bully Colorado into continuing to protect out-of-state businesses at the expense of local companies and vital state services like education, healthcare, and roads.  But Colorado will not reward Amazon’s decision to hold its affiliates hostage.” [emphasis in original]

    2. Maybe someone who had a working Affiliate account making them some money can share their experiences and correct me if I’m wrong. But I think “firing” is not quite the exact term, since that implies the Affiliates were employees, or people making their living through the Affiliate program.

      As I understand it, the Affiliates got a percentage for sales made when they steered customers to the Amazon site. So they were getting a fee for performing a service, and now the service is no longer required. It sucks, but I can’t quite imagine that it was paying the bills for anyone.

      It’s kind of funny that people are getting mad at Amazon for going against the wishes of our legislature — considering how often we all get mad at our legislature right here on this site.

      Not that I’m trying to say Amazon is a poor little victim.  I’m quite sure they are against the bill and fighting it because they think it will hurt their profits.

      I just think it’s a poorly thought-out bill, a desperation move to grab some much needed cash that won’t really help all that much compared to all the trouble that will be required to get it to work at all.

      1. and the attempt to make sure everyone “with a nexus” to Colorado was paying a tax that everyone “with a nexus” to Colorado was supposed to pay, but which Amazon, and Amazon alone, decided to skirt.

        1. That is not accurate, Steve.

          There are thousands of online retailers that don’t have a physical presence in (or “nexus with”) Colorado, and they have been following the law by not collecting sales tax, because the Supreme Court says states can’t collect through retailers that don’t exist in the particular states.

          (Apple, Barnes & Noble, and Wal Mart, for that matter, collect sales tax because they have stores or distribution centers in Colorado. Amazon and plenty of other online retailers do not.)

          Amazon probably has among the largest sales volume into the state, but it wasn’t “skirting” the law and it was far from alone in its policies.

          1. through its affiliates, and preferred to avoid the tax that it in fact has always owed by “firing” (severing their relationship with) those affiliates in order to continue to avoid paying the tax that they owed. The others, who in fact had no nexus to the state, were obeying the law. Amazon was not, as Old Time Dem notes somewhere on this thread (and as one legislator pointed out to me weeks ago).

            1. specifically does NOT make the nexus-affiliate argument, which was made in North Carolina and Rhode Island. Even so, Amazon is hardly the only online retailer to use an affiliate method to boost sales.

        2. Or Amazon because they are perceived to be a large and tasty cash cow?

          Sure, they are huge and their Colorado sales revenue is probably substantial. But internet sales in general are also huge. If this bill was actually written and passed to aim specifically at Amazon…that’s a lot of legislative time spent (with more to come as Amazon has a go at the main chance and fights) for limited and maybe diminishing returns.

          Internet sales are only going to grow. Instead of messing around with a loophole law here and there, what if someone started doing some hard thinking about how to fairly apply sales taxes across the board on internet sales?

          1. To oppose a law that is a step in the right direction because it is not a leap to perfection is not an approach I would take. Then to argue against holding a huge and hugely profitable multinational corporation accountable for some very machiavellian maneuvering at the expense of the people of Colorado, on the basis of the marginal defects in the law that they are using as their pretext, just doubles-down on the error.

            1. and I don’t oppose it because it’s not perfect.

              I just think this is going to be a giant mess. It’s going to require tons of paperwork for both Amazon and the state and it’s going to be massively confusing to the public when they try to figure out who to pay.

              My guess is about 1/4 will try to pay Amazon and have to be straightened out, 1/4 will get it right, 1/4 will have to be dunned a couple of times before they pay and 1/4 will do their darnedest to duck out of it entirely.

              Plus about 95% will be really peeved at both Amazon AND the state.

              I’m sorry, I think the legislature thought, “Wow, THERE’S some free money we can grab!” and went to town.

              One last point.  It’s not Amazon that will be paying this sales tax. It is US. Not that I’m so naive as to think Amazon is fighting this new tax for we, the customers’, benefit. But in real life that’s kind of what is happening all the same.

              1. Whether a business is taxed or its customers is the same thing; some portion will come from customers and some portion from profit (investors’ dividends and upper management’s salaries), depending on a combination of variables that don’t include where the tax is levied. So, to be precise, both Amazon and us will be sharing payment of the sales tax. Old Time Dem, I think, wasn’t quite right when he said that companies can’t bear the sales tax in place of customers, because companies set prices, and can (and do) adjust prices downward while charging the sales tax, effectively bearing the tax to some extent themselves.

                1. You wrote:

                  “It appears to me that the notification requirement only applies if the company does not collect the sales taxes themselves (which it can do by simply including them in the price, or undertaking to pay them themselves)” (emphasis added)

                  Either would appear to violate CRS 39-26-108, which makes it a misdemeanor to “advertise or hold out or state to the public or to any customer, directly or indirectly, that the tax or any part thereof imposed by this part 1 will be assumed or absorbed by the retailer or that it will not be added to the selling price of the property sold or if added that it or any part thereof will be refunded.”

                  1. “advertis(ing) or hold(ing) out or stat(ing) to the public or any customer” anything, just about how pricing actually occurs. Sales taxes do affect prices, by shifting the demand curve downward, just as corporate taxes affect prices by shifting the supply curve upward. However, David’s point below renders this largely moot.

                    1. itself:  including tax in the price or paying it without collecting it is known as “absorption,” which is prohibited by CRS 39-26-108.  It’s hard to see how Amazon could do that without at least indirectly nullnulltheir customers.

                    2. No statute prohibits companies from setting prices according to supply and demand. Taxes affect the supply and demand curves in specific ways. The resultant equilibrium market price distributes the tax burden between company and customers (leaving aside for this conversation David’s correct observation that a local tax has only a marginal effect on the price set by a much larger market). This is not absorption, but rather how market-clearing prices work. As long as the company sets its prices according to supply and demand, some distribution of the tax burden results incidentally to doing so.

                2. That’s not true. Amazon doesn’t want to undergo the expense of notifying every customer in Colorado (and the state) about every transaction, and Amazon doesn’t want to suffer the ill-will this will certainly generate among customers. It has nothing to do with Amazon “sharing payment” of the tax, which it won’t.

                  2. As a general rule, taxes either shift the demand curve downward or the supply curve upward (depending on where they are levied), causing some distribution of the burden on customers and company (investors). David’s point below, that this is a localized tax rather than a market-wide tax, means that that shift is diminished by averaging the impact of the tax across the market, meaning that Coloradans bear the proportion as if it were spread across the entire market. In other words, in effect, you’re right, Amazon won’t be sharing any significant portion of the tax burden in this case.

                  3. Amazon doesn’t have to notify every customer in Colorado about every transaction. It can simply charge the sales tax instead. If it does the latter, it doesn’t have to notify, which was a compromise accommodation to allow them not to charge the sales tax.

                3. I speak 100% to your statement levying no judgement as to you personally. Your statement

                  because companies set prices, and can (and do) adjust prices downward while charging the sales tax, effectively bearing the tax to some extent themselves.

                  You are wrong. I base this on direct specific knowledge. When we have to collect sales tax on Colorado sales (which we now do), we will not drop our price at all.

                  We can’t bear some of it – that would require a different set of pricing for Colorado which would honk off the 99% of our customers outside of Colorado.

                  The customer will bear 100% of the sales tax for almost any online store for the same reason – prices are public and most customers are outside the state.

                  1. The price-setting adjustment to taxes, which does generally occur as a result of the shifting of either the demand or supply curve (depending on where the tax is levied), takes into account the overall or average tax burden placed on the company, and not any one localized variation. The customer will bear 100% of the tax burden in the same way that a single new customer does not affect the price of a commodity, but only makes a marginal contribution to the setting of that price. In reality, the customer doesn’t bear 100% of the tax burden, but far closer to it than would be the case if the tax were imposed market-wide. Depending on the proportion of sales in Colorado, it would certainly approach 100%, as would be the case with Amazon.

          2. Affiliate nexus laws are generally known as “Amazon laws,” principally because Amazon has been incredibly vigorous in opposing them.  When New York passed its version, Amazon was the first to file suit (and so far, the first to lose).

            The new law requires reporting–low cost, low burden, not particularly onerous.

            And, states are thinking hard about how to fairly tax internet sales.  Guess who opposes that?  Hint–it starts with an A…

      2. There’s nothing about “firing” that supposes someone makes a living from the relationship. If I fire the kid who mows my lawn, I don’t suppose that sends him to the poor house, or affects his other sources of income.

        And I agree with you, the results of the bill will be a headache for retailers, consumers and the state, without much benefit. It’ll be next year’s version of the FASTER late registration fees when Colorado households start getting those letters from every online retailer they used this year.

        1. As it were. 🙂

          So you decide you don’t want/need little Johnny to mow your lawn.  Suppose his mom comes over to ask you why.

          If you have nothing against Johnny, you say you ‘made a change’ for whatever reason.

          If you’re ticked off because you caught Johnny peeing behind the rosebushes, on your cat, you say you ‘fired’ him and hope his mom gives him what for.

          It just seems like to me this (legitimate) argument is being over-dramatized here and there. Plus even the Gov’s press release conflated Associates with Affiliates and said Amazon was taking away jobs, etc.

          Maybe I am wrong about the financial loss Affiliates are looking at, since (by my own fault) I never made a dime from the ad/link sharing program.  Maybe someone could give us a ballpark figure without violating anyone’s confidentiality?

  12. Long but good.

    Amazon.com needlessly fires affiliates in tantrum over tax law

    Amazon.com informed its Colorado affiliates today that their contracts were being terminated in response to House Bill 10-1193, a sales tax clarification just passed by the Colorado Legislature. Amazon’s mass firings are a misguided attempt to bully Colorado for trying to boost efficiency and tax compliance to partly offset deep reductions in public services.

    Contrary to Amazon.com’s claims, the bill has no effect on relationships between Internet retailers and their Colorado affiliates. Recognizing a growing shift to Web shopping, HB 10- 1193 requires Web-based stores such as Amazon.com to alert customers to their tax liability associated with Internet purchases.

    “This action to fire business associates as retaliation amounts to corporate bullying,’ said Alec Harris, economist with the Colorado Fiscal Policy Institute.

    Internet affiliates like those Amazon.com fired use blogs and other Web sites to advertise on behalf of retailers for a commission. For instance, an Amazon.com affiliate might post a link on her blog to a recommended book sold on Amazon.com as part of a contract with Amazon. Under such a contract, the affiliate receives a commission for every click or resulting sale the advertisement generates for the online retailer.

    As online retail accounts for a growing share of consumer spending, state and local governments are losing a traditional and much-needed source of revenue for schools, medical care and other vital public services. Unlike retailers with a physical presence in the state, Internet-only retailers are not obligated to collect sales tax on behalf of their customers. The fact that online retailers do not collect the tax does not eliminate the tax liability for purchase. But few consumers are aware of their tax obligation. Companies that have a physical presence in Colorado and collect the tax to help support their communities with jobs are placed at a disadvantage.

    In the face of increasing losses of sales tax revenue as a result of online sales, several states have tried to collect taxes owed on internet sales. New York, Rhode Island and North Carolina have all passed laws which use an affiliate approach to require out-of-state online retailers like Amazon.com to collect sales tax on behalf of their customers. Colorado chose a different approach, asking Internet retailers to inform customers of the tax obligation of the online purchase.

    Even this more moderate approach provoked Amazon.com to fire its affiliates in Colorado just as they had in Rhode Island and North Carolina.

    “The Colorado bill specifically avoids affecting affiliate marketing. Yet Amazon.com has fired its Colorado affiliates,” Harris said. “Their action shows a total disregard for their Colorado-based business associates.”

    Amazon.com’s position was clear in the letter of termination: “If Colorado would repeal the current law … we would welcome the opportunity to reinstate Colorado-based Associates.” But its firing of affiliates in Colorado shows clearly that Amazon.com is simply unhappy about having its customers alerted to the tax legally due on their sales, and is willing to use its Colorado affiliates as hostages in protest.

    The Colorado Fiscal Policy Institute calls on Amazon.com and other Internet-only retailers to comply with the law. By firing its affiliates, Amazon.com only hurts its own business and people working to make a living; its legal obligations do not change. Consumers, meanwhile, should remember there are alternatives for Internet purchases from retailers that provide jobs in our state and support Colorado’s communities.

    The Colorado Fiscal Policy Institute is a project of the Colorado Center on Law and Policy, a nonprofit, nonpartisan research and advocacy organization promoting justice and economic security for all Coloradans.

  13. Thought I would address a couple of things posted so far that seem to be incorrect, plus add a couple of new data bits to consider.

    It’s true Amazon has a history of shooting itself in foot now and then. But I think I can see why shutting off Colorado Associates seemed like it was worth a try.

    (Disclosure 1: I got one of these emails this morning. I signed up for this program years ago, but never quite got around to actually DOING it. Still, I’m off the roles like everyone else.)

    It seems to me likely that Amazon is fighting this, NOT because they are being asked to collect sales tax, but because a. that will be the next thing states will ask them to do and b. what they ARE asking them to do will piss off their customers big time.

    The bill wants Amazon to send each of their Colorado customers (via separate, first class mail) a list of things bought from them, with dollar amounts, letting them know they need to file a special tax form to pay the state. They also have to narc on you to the state with this info.

    The customer (maybe YOU!) will get a cheerful note from the state saying, “Hey, we see you bought $187 worth of goodies from Amazon this year. Nice! Please remit $5.42, kthnxbai.”

    Seems to me there’s a lot of paperwork, person-hours and duplication of effort going on here, which is going to knock a good chunk off of the amount of tax Colorado is anticipating.

    The reason Amazon canceled the Colorado Affiliates is because the ‘nexus’ or ‘presence’ within the state seems to be determined by whether they advertise here or not. Since the Affiliates are a form of advertising, they got the chop. Could be their other kinds of advertising is next.

    What I HOPE isn’t next are their third party sellers. (Disclosure 2: One of whom is me.) I sell most of my used books via Amazon. (Disclosure 3: Yes, I voluntarily pay my assorted taxes on all this income. Most used book dealers who aren’t terminally stupid do.) It’s not a huge sum, but 98% of the money for these books is coming INTO Colorado from literally all over the world. Depending on what kind of year we’re having, between $3-5K goes JUST to our local Post Office. Oh, and I sell better quality books for no charge for our local Friends of the Library, so they are getting a few hundred bucks a year that supplements what they get from the taxpayers and eases those burdens just a bit.

    As I said, I willingly pay my taxes, and I do understand that Colorado needs the money. I just don’t see that this bill was a very sensible way to go about it.  I think it’s going to be more trouble than it’s worth, and hurt more people than it will help.

    More later, perhaps. Right now I have to finish wrapping books going out to Hawaii, Virginia, South Carolina, Iowa, New York, Wisconsin and Spain.

    1. It sounds like Amazon plans to challenge the law, and by being able to claim it doesn’t have any physical presence in Colorado (including through affiliates), it’ll have a stronger challenge.

    2. the notification provision you cite is already on the books as CRS sec. 39-12-112(3.5)(c), and is merely being incorporated by this new amendment to be in effect where it was always meant to be in effect. Furthermore, it appears to me that the notification requirement only applies if the company does not collect the sales taxes themselves (which it can do by simply including them in the price, or undertaking to pay them themselves). If Amazon pays the sales tax, whether by collecting it from customers or including it in their own costs, there is no notification requirement.

      1. And if other retailers like apple can do, so should they. Amazon likes to think they are above the rules put in place and followed by their peers and their customers.

        People need to start directing this rising anger to where it belongs…Corporate America

        1. Unlike Amazon, Apple has a physical presence in Colorado. Amazon has been playing by the rules set by the Supreme Court, just as other online retailers have. Your anger is misdirected.

      2. Subsection CRS 39-12-112(3.5) was added by HB 10-1193.

        The emergency regulations you link to cover the issues raised by the bills passed in the last few weeks.  They are new.

        Also, vendors cannot absorb sales tax.

    3. Amazon has developed a dangerous habit lately of trying to strongarm other businesses into doing what they want.  A couple of years ago they tried to require that self-published authors use their printing press when selling books via their site.  A POD company, Booklocker, brought an antitrust suit against them, and won a settlement just a couple of months ago, I believe.  Then recently Amazon also tried to force a major publishing company into offering ebooks at $9.99 through Amazon — by refusing to sell their books until they complied.  Luckily, Macmillan called their bluff and won.

      Amazon is showing themselves as a big bully in the marketplace, and now they’ve started trying to bully local government as well as other businesses.  I sincerely hope that you don’t fall for their strongarm tactics.   don’t let Amazon dictate what is best for our state — keep that law on the books where it belongs!

    4. The theory is that affiliates create physical presence, which the US Supreme Court has said is required in order to subject a vendor to the requirement to collect sales tax.  Advertising, in and of itself, does not create physical presence.  Affiliates created nexus because of their physical presence and because they were acting on behalf of Amazon, not because they advertised Amazon products.

    5. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax – a course we won’t take.

      What’s with the “voluntary” piece?

      1. is not required to collect and remit sales taxes unless the vendor has nexus with the taxing state, which generally requires physical presence.  A vendor could, but almost never will, collect sales taxes voluntarily.

        I think the quoted statement is bullshit. Which is easier for Amazon:

        1.  Collect and remit sales taxes; or,

        2.  Send a letter to every customer (essentially like sending a W-2 or 1099) and an electronic file to the Colorado Dept of Revenue each year.

          1. (Keeping in mind I am neither a lawyer nor a writer-upper of regulations)

            What the state of Colorado WANTS is for Amazon to collect Colorado sales tax whenever someone in Colorado buys something through their site.

            Apparently there are legal reasons so they can’t just tell Amazon to collect it OR ELSE.

            SO they came up with a way to claim Amazon kinda sorta has a legal business presence in CO and is therefore kinda sorta required to help the state get a percentage when Colorado citizens spend their money. The requirements they have enacted mean Amazon can either keep special track of all CO sales and then send out a mass mailing to all their CO customers once a year telling them to give CO X amount of $, PLUS turn all that info over to the CO Dept of Revenue….

            OR they can give in and charge CO customers MORE than they charge other customers, then give the collected taxes to CO.

            In other words, CO is telling Amazon, “So we can do this the easy way, or we can do this the hard way….”

            And Amazon is saying, “You’re not the boss of me, plus I have many people offline telling me you are WRONG.”

            So really, they both need a good swat and the time-out corner, from where I sit. This could be worked out if both sides weren’t stuck in stubborn posturing mode.

            1. The “legal reasons” are right there in Article 1, Section 8 of the Constitution.

              Congress shall have Power…

              …To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

              http://www.usconstitution.net/…

              Amazon itself selling to someone in Colorado is “interstate commerce.”  An Amazon associate located in Colorado selling to someone in Colorado is not “interstate commerce,” and does not fall under this clause.

              That’s why we have a “use tax” instead of a sales tax on some types of purchases.  It’s what David has been writing about lately in his diaries and comments.  A “use tax” has nothing to do with interstate commerce; a sales tax does.  The state can compel its residents to do certain things that it can’t compel out-of-state vendors to do.

              It’s not clear that a state can compel an out-of-state vendor to collect sales tax.  Regulating interstate commerce is an enumerated right of Congress, not subject to the 10th Amendment.

              I am not a lawyer and I don’t play one on TV, but this one will undoubtedly end up in court.  It’s complicated, and there’s lots of precedent for the use of the “interstate commerce” clause to do all sorts of things not intended by the founders.  This one, however, would seem to be pretty close to the founders’ intent.

              I haven’t read HB10-1193, so I may be full of it here, but on the face of it I don’t feel that Amazon is simply being punitive to Colorado associates.  It’s just trying to keep its commerce as “interstate” as possible.

                  1. according to where the consumer is. What am I missing? Why doesn’t that make sense?

                    I see below that Go Raiders asks a question about purchasing a gift from another state and sending it to South Carolina. I would think yes, he has to pay CO state sales tax because he lives in Colorado (if we were to change the rules).

                    Would we start seeing a bunch of credit cards with OR addresses?  

                    1. If the goods are never in Colorado then Colorado has no standing to collect a tax of any kind. This is fundamental to our federal form of government – a state cannot compel squat in another state.

                      What makes this even more screwy in the case of electronic goods (like software) is where the goods are delivered and/or used does not have a clear cut answer in many cases.

                    2. always ships expensive things to Oregon and then finds a cheaper way to get them. He claims to have an address in Oregon.

                      If I get something shipped to Colorado, then the goods are in Colorado. Tax it Colorado rates.  

    6. that there are always people around to portray a corporation–no matter how large, no matter its monopoly power, no matter what its practices–as an innocent victim of big bad government.

      Then there are times when it doesn’t amaze me.

      I guess huge corporations with monumental profits need people sticking up for them just like unemployed people do. So thanks for your service to America.

  14. The original bill made Amazon liable to collect sales tax based on having affiliates in Colorado.  To meet that objection, the responsibility to collect sales tax was dropped and replaced with a reporting obligation only.  Yet Amazon fired their affiliates anyway…

    I suggest that Colorado didn’t need the bill anyway to hold Amazon liable for sales tax collection, and that Colorado should immediately issue a notice of deficiency for the past three year’s sales tax that Amazon failed to collect.

  15. A normal Colorado, “bricks-n-mortar” business like Tattered Cover, pays state and local sales tax, computed at the cash register. Amazon ships to customers in Colorado without collecting the sales tax, which apparently is the legal responsibility of the customer.

    Computers are wonderful things. They make it very easy to calculate and collect taxes, and then assign them properly to the state.

  16. First, I want to repeat I am NOT against an internet sales tax, even though it seems to give a lot of people the heebie-jeebies to even think about it. I just think it needs to be nationally mandated in such a way that it is fair and makes sense. I mean, taxation is supposed to go along with representation, right? Or it should be a means of paying for a portion of the services one gets from governmental entities?

    I just bought a little cement mixer last month from a company in Minnesota (on sale AND free shipping!). I know I couldn’t have bought one like it for such a low price in Lamar. Maybe I could have found one somewhere in Colorado, but I would either have had to have it shipped to me, or drive to get it.

    The only way I can think of that this purchase costs the state of Colorado anything is that the delivery service used the highways to get it here — but those companies already pay their own taxes, right? And the tax on gas? So if I DID pay state sales tax on it, shouldn’t it be to Minnesota for being the home of the company, where it’s using state services to keep the business safe and running?

    You might say I am hurting Colorado businesses by not buying locally. We actually hear that ALL THE TIME here in Lamar, “OMG, if you don’t buy in Lamar you are EVULLL!” Never mind they don’t have much of a selection of goods and what IS here is usually way over-priced. So I tend to think that the company that earns my business is the one that goes to some effort to make me want to deal with them.

    Whether we like it or not, the business model is changing for ALL businesses, large and small. Yelling about the evil of big corporations may feel satisfying, but it doesn’t make change happen. It seems to me that thinking and coming up with practical strategies is more likely to help — for individuals, small businesses, progressive groups, legislative bodies and so on. Yeah, I know, dream on.

    Here’s what we are hoping to do this year. We have an offer to use the upper floor of our arts council’s building as a bookstore if we also oversee a meeting room and reading room, and help with the cost of utilities. Besides continuing our internet sales, we will be selling good used books, which there is strong interest in. For reasons that would take WAY too long to explain here, we won’t deal in stacks of new books. BUT we will help people order them online, including from Amazon if that’s the best deal for our customers. (And yeah, we WILL collect the state’s cut. 🙂 )

    It wouldn’t work everywhere, but we believe it will work here and will be a general Good Thing for everyone involved.  

    1. What has been incredibly frustrating to me about the sales tax on software being turned back on, is I support it. I think we should all pay our fair share. Same with the use tax.

      But the state has been so inept in how they have handled both that and this use tax issue. It’s like they searched for ways to make it as bad as possible – in both cases.

    2. In addition to all your arguments being against straw men, and all your rationalizations for not paying taxes within your community being meritless, your web site is broken as fuck.

      I mean, come on. At least get that right.

      2. “Broken as fuck” is an interesting phrase. Is that how you experience your fucks? Perhaps that is part of the cause of your crabbiness.

        I am aware that CodeNeonBlue is down. (Explanation redacted for excessive geektalk.) Fixing it actually on my list of things to do, but I currently have other responsibilities that take precedence. Thanks for letting me know you tried to visit, though.

        Re straw men and me NOT paying taxes: I think you may be having some trouble with ‘reading for content’. Maybe you could look into getting some help for that, after you get your fucks fixed.

        As for the more serious points this whole post addresses, I have no problem with those whose opinions differ from mine as to what exactly is the problem here and what some useful solutions might be. My intention was to point out that the issue is not as black and white as it has been presented.

        Amazon, like all businesses, is out to make a profit. (Whether or not making a profit is evil is well outside the scope of this discussion.) It’s not much of a leap to assume that fighting back against new laws (any of them, not just Colorado’s) that are likely to have a negative effect on their business seems to them like the only sensible thing to do.

        Amazon has become a huge success because they meet their customers expectations and give better value than similar merchants. That is why I deal with them.

        As a ‘customer’ of our legislative branch, I have to say my satisfaction with their ‘product’ is mixed. The specific bill at issue here is, in my opinion, a lemon. It’s a stick with no carrot, and possibly a small and unenforceable stick at that. If it DOES manage to be implemented, it is so inefficient that there will be little or no net gain from it.

        As others have said, the internet tax issue is insanely complicated. It is going to need to be solved one way or the other, because leveling the playing field for all businesses and protecting consumer rights are both crucial tasks.

        I just hope we don’t have to wait until the 22nd Century to get some representatives who can figure out how to cope with the realities of the 21st.

        1. It’s not complicated at all.

          It works like this:

          1.  If you have nexus, you have to collect and remit sales taxes.

          2.  If you don’t have nexus, you don’t have to collect and remit sales taxes.

          3.  If you don’t have nexus, you might nonetheless have to provide information to a taxing authority that would prove useful to the taxing authority.

          The first and second points are generally well-settled law.  Colorado has more or less conceded that Amazon does not have a physical presence, and thus does not have nexus.

          The third point is not well-settled.  The analysis under the interstate commerce clause focusses on whether a particular state requirement unduly burdens interstate commerce.  If there is physical presence (which affiliates might create), the power to require Amazon to collect tax would imply the power to require Amazon to provide information regarding purchases.  The question (and I think it is a novel legal question) is whether the relatively slight burden of requiring certain reporting also requires physical presence of Amazon in Colorado.

          Clearly, a large part of Amazon’s success is that it can offer lower prices because its sales are not subject to sales tax and its customers generally evade the use tax.  The new law is a cost-efficient way to prod Coloradans to comply with the tax law.  

          1. I don’t use Amazon because it’s cheaper, I use it because it’s convenient. I’m sure I could go elsewhere to get a better price. So adding sales tax to my purchase – not going to change what I buy from them at all.

            Granted some people are price sensitive. But they are the ones who will comparison shop and find better deals than Amazon today – and so they are unlikely to be a significant hit to Amazon.

            I think, based on what we are going through here at work trying to figure out when we have to charge tax now, is that the big reason Amazon objects is because computing, tracking, and reporting this is a giant PITA. If states did not make executing on this so horribly difficult, then Amazon might be more agreeable. For example – requiring Amazon to mail statements? Really?

            1. Amazon is fighting all sales tax laws, everywhere.  It has not divided them into “good” and “bad” laws.  It is simply the company of no.

              What exactly is your objection to requiring tax reporting by Amazon?  That it’s mail? Or is it to any reporting requirement at all?

              1. At the same time, I would like to see the states:

                1) Make it easy and low-cost to do it.

                2) Make it easy to determine what jurisdiction, if any (in this country), gets the tax.

                The fact that the law requires Amazon to mail the yearly statement shows the state is not looking for easy/low-cost. The fact that DoR cannot say where tax is paid for very common scenarios says it is not even possible to determine where the tax payment goes.

                The state needs to do a better job. At present I am not taking sides because I agree with the concept of the state collecting, but disagree with the incompetent way they are approaching it.

                1. is still the standard way to deliver tax documents (I suppose they could have allowed hand delivery).

                  The DOR does not create the law.  If you find it confusing, consider blaming it on the legislature.

                  The taxability of the vast majority of transactions are easily categorized, but there will always be grey areas.  That shouldn’t be a reason to favor tax evasion.

                  1. Yes, the legislature is the one that should have written the law to allow email delivery. Why they require mail for this, when it is arguably less reliable than email, is beyond me. Postal union pressure?

                    As to the taxability of transactions, digital goods are now being taxed for the first time. Many are not easily categorized (does html count as a program).

                    In addition, in many cases it is not clear where the software is delivered – and that goes to the crux of who gets the tax money.

                    I think this is the big problem, the legislature and the DoR, like you, figured this isn’t much different. A book Amazon ships to my house isn’t. But a book delivered to my Kindle is.

                    I don’t favor tax evasion. But I also don’t favor the state making collecting the tax horribly inefficient and expensive. So I will stick with “a pox on both your houses” until the state decides to do this efficiently.

        2. was what I actually said, so, um, yeah. Sorry if that messes up your “reading for content” joke, it really was cute otherwise.

          Your argument that everyone tells you it’s evil to not buy things locally is called a “straw man.”

          As for this:

          As a ‘customer’ of our legislative branch, I have to say my satisfaction with their ‘product’ is mixed.

          Sorry to break with my tradition of civil discourse here, but that’s just a dumb thing to write. Not every institution exists to make you smile.

          And my fucks are fine, thanks for your concern.

          1. 1. I do in fact pay taxes within my community.

            2. There’s a difference between a straw man and an illustrative point.

            3. I am under no illusion that the legislature or its members live trembling in the hope of winning a smile from me. I DO expect certain minimum standards of reasoning and consideration of possible consequences of their official actions. In this, I feel they could do better.

            I do actually know you have the ability to read for content, since otherwise you wouldn’t be so good at splitting hairs and misrepresenting fairly clear statements.

            Clearly I have deeply offended your sensibilities by suggesting an Evil Corporation might have reasons for its actions other than good old world domination. (Even though knowing your enemy and using that knowledge to win over him is an age-old strategy.) Sorry, I am always messing up on the concept that to be a REAL (political label of choice), one’s ideas must be trimmed to fit one’s adopted ideology.  

  17. That has a couple of pieces. I think part of this is Amazon not wanting to give in on one state because then the others will pile on. But I think part is also the expense of this – mailing a letter to every customer and to the State of Colorado. Plus a lot of those customers will be pissed off at Amazon at the end of the year when Amazon narcs on them and they have to write a check to the State.

    On the flip side – this is a crappy way to fight back. Especially after they re-wrote the law to avoid this specific situation. Amazon is clearly trying to get people mad at the state. For what? It’s not like the legislature will undo the bill – that would be political suicide.

    So we ride it out. Associates get a P.O. Box in Oregon (no sales tax) and are back in business in a week. The state gets ready to sue Amazon when there’s no reports at the end of the year. And the additional income from use tax remains unpaid.

    Everyone loses.

    1. You mean like how the legislature held firm on the late fees on auto registrations that were part of FASTER last year after a huge public outcry?

      How the legislature thinks it’s worth the cost of enforcing this tiny revenue increase is beyond me.

    2. Although the degree of losing is different for different players.

      Just one argument–as I mention about, Affiliates (people running ads and web links) are not the same as Associates, people using the Amazon site to sell books belonging to them. I am guessing that under existing law, third-party vendors are independent contractors and don’t create the infamous nexus/presence for Amazon.

      Just to make things even more interesting, some booksellers think Amazon is plotting to conscript their third party sellers with some of their new programs. I have no opinion either way at this point. 🙂

  18. What we most want to avoid is uncertainty and extra work. Yes some Internet sales are very price sensitive, but most are not.

    Uncertainty – where is a customer truly? If everyone claims they live in Oregon to avoid taxes, can you then go after an online company when you find 49% of their customers were lying?

    Extra work – it’s a major effort to figure out what the tax is for any given address. It’s a major effort to then get a sales tax license and file the various payments with the appropriate city and the state. And heaven forbid you have a question – DoR doesn’t answer questions quickly.

    At a minimum have a single sales tax for online sales in Colorado. And require nothing more than a payment and a listing of how many dollars in each zipcode – all done electronically. No that doesn’t fit our mess of taxing jurisdictions, but it has a much better shot at being accepted. And the entire thing is paid to the state which then forwards some on to the localities.

    You’ll still have Amazon and others fight it (who ever said yes, please add some complication and expense to my life). But the intensity of opposition would decrease. Especially if the state can get other states to join in and they do this in unison.

    1. There is software to calculate and collect sales tax.  Just like there are cash registers to calculate and collect sales tax.  Sure, it requires pushing another button and filling out forms. DUH!

      As for cheating customers, simply use the address on their credit card account.  If they are not honest about that, the credit card company will not authorize the charge.  DUH!

      1. 1. At a Starbucks the sales tax is x.yz% – they know the tax for their location. Online you need to figure out the taxes in effect for a given address. That is a very complex question in Colorado, both are you in a given district (I have a friend that says it’s not clear if his house is the last in the City of Boulder on his road or the first in the County). And second, what are all the taxing authorities.

        2. Where is a product actually being used. The DOR said that when I downloaded a book on my Kindle in Arizona, that Arizona should get the use tax on that purchase. Most of our customers are buying a bunch of licenses and those licenses go to various countries to different team members. Even if the person purchasing wants to be totally honest – they aren’t sure where everything is going.

        Online makes this a much more difficult question.

      2. But what about the situation where I might purchase something, say as a gift, and have it shipped to an address in North Carolina???

        Since the item has never had a presence in Colorado, wouldn’t that be exempt from Colorado’s use tax and be more appropriately subject to North Carolina’s use tax?

        Denver Broncos… Still Suck!

  19. And yes, this is a pet peeve, I can see how others figure this is to be expected. But our legislators were not paying the use tax (most, not all). Why did they not look in the mirror and figure out a less difficult way by which they would pay the tax.

  22. Here’s another interesting data point. The state talks this up as they had no alternative – people just weren’t paying. Really? I think the core problem has been that the state didn’t even try to get people to pay.

    1. Got answers back from DoR about when should I pay. They answered 5 of the 8, on 2 of the 8 they said they’re trying to figure it out, and on 1 of the 8 they have no idea and will look at it. You’re not serious about collecting a tax if you can’t answer 3/8 of some very simple questions (none of them hypothetical, all actual scenarios I faced last year).

    2. They emailed me a paper form to fill out for my use taxes for the last 3 years because they have no online system. Imagine if everyone did pay for 2009 – they can’t process that many paper forms. This is not a system working to get people to pay.

    1. Use tax is an important component of sales tax audits.  Of course, the state goes where the money is, and targets its audits at businesses who often have substantial use tax liability.  There is little impetus to target individuals–except in the case of cars and planes, which are worth going after.

  23. It’s just not going to happen. Here’s why – they are presently not set up to do so. The only way to make this work is to have an online system for people to enter their info and pay the tax. If it’s paper forms and checks the cost of processing a million payments of $12.53 will cost the state a lot more than it takes in.

    Now DoR is working on getting an online system set up. And I’m sure they are using OIT to manage the process. So based on OITs track record of always being years late – figure in 2014 they’ll be ready to try.

    And if it’s up to OIT’s normal impeccable design standards, it will require 13 screens where you re-enter each piece of information 7 times. People asking to receive benefits may go through that. People who need to pay the state 12 bucks will say screw it and stop on page 3.

    So the state will fight with Amazon. The state may win. Amazon may send out the notices to individuals and the state. But the state is not going to see any additional income for years.

    On the good news side, this could finally force the state to staff OIT with competent people. It’s fine if OIT’s incompetence leaves the poor without food, medicine, and other benefits. But if it costs the state income – that might get Governor Ritter’s attention.

    1. 1.  Add a line to state income tax forms to report purchases subject to use tax, and collect the use tax from income tax filers.

      2.  Match the vendor statements against the income tax returns.

      3.  Send a use tax return to every person who didn’t file an income tax return for whom a vendor statement was received.

      1. That makes a lot more sense than what they told me they are planning. Keep trying, you need to leave 5 or so messages before you get a call back.

        With that said…

        2. Matching is not trivial – Amazon could have a very different address from the one on the tax form. A lot of people use their work address with Amazon because that’s where they want stuff shipped.

        3. Is that worth the cost – Dear Mr Smith, you owe us $3.27. Pay in 2 weeks or we will have the Attorney General file charges. Yeah that will be profitable…

  25.  Mr. Morse, I just watched your video on ColoradoPols.com and I think that you should be ashamed of yourself.  You skewed the truth.  What entitles the state of Colorado to money from people buying off a link.  What you are suggesting is ludicrous.  Example:  My employer goes to Wyoming and buys a machine and then he goes and picks it up and drives it back, going through Weld County, then because he used their pathway, they are entitled to Sales Tax or A Use Tax.  Let’s get real, this is literally HIGHWAY ROBBERY.   Someone comes to my website, I am selling nothing, they click on a link and it sends them to the correct website where they can buy what they need.  And you think that just because they found that website through my web-page, located here in Colorado, the State of Colorado deserves to receive some money.  I know that this will not hold up in Federal Court and I am just counting the days.

    Good morning Ladies and Gentlemen;

    I and a few friends of mine who have online businesses have been dramatically damaged this week.  This House Bill 10-1193 has crippled our businesses.  I have attached the E-mail that one of our Affiliate Program Sponsors gave us.  We realize that you are trying to generate revenue for our lovely state of Colorado, but by instilling this new bill,  you have actually decreased it.  We can no longer make money on our website, that was our lively hood and in taking away our lively hood, we can not spend any money in Colorado.

    I called and left a message on McNulty, Frank

    43 Douglas R Attorney  Cap: 303-866-2936

    because he doesn’t have an email address published, can you pass this on to him.

    I hope you will reconsider this bill and stay within the Constitutional guidelines that ALL other states are following.

    Senator Lois Tochtrop and State Representative Judy Solano; I have dealt with both of you personally with other issues.  Foreclosure and our Welfare System.  I can not believe that you think this is a good thing for Colorado.  This bill will affect

    me and thousands of other peoples lives.  We just got out of foreclosure and now you bring this down on us.  I am saddened by this.

    Dear Colorado-based Amazon Associate:

    We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

    We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

    There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

    You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter , who signed the bill.

    Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

    We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.

    Best Regards,

    The Amazon Associates Team

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

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

    5 COMMISSION OR OTHER CONSIDERATION, DIRECTLY OR INDIRECTLY REFERS

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

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

    8 PRESUMED TO HAVE SOLICITED BUSINESS ON BEHALF OF SUCH RETAILER

    9 AND SUCH RETAILER IS DEEMED TO BE DOING BUSINESS IN THIS STATE.    10 THIS PRESUMPTION SHALL NOT APPLY UNLESS THE CUMULATIVE GROSS

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

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

    13 AGREEMENT WITH THE RETAILER ARE IN EXCESS OF TEN THOUSAND

    14 DOLLARS DURING THE PRECEDING CALENDAR YEAR. THIS PRESUMPTION

    15 MAY BE REBUTTED BY PROOF THAT THE AFFILIATE WITH WHOM THE

    16 RETAILER HAS AN AGREEMENT DID NOT ENGAGE IN ANY SOLICITATION IN

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

    18 REQUIREMENT OF THE UNITED STATES CONSTITUTION DURING THE

    19 CALENDAR YEAR IN QUESTION. NOTHING IN THIS SUBPARAGRAPH (II)

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

    21 OF THIS ARTICLE.

    22 (B) FOR PURPOSES OF THIS SUBPARAGRAPH (II), “AFFILIATE”

    23 MEANS A PERSON RESIDING IN THIS STATE THAT MAY SOLICIT BUSINESS BY

    24 MEANS OF A PUBLIC FORUM IN THIS STATE.

    25 (8) “Retailer” or “vendor” means a person doing a retail business

    26 IN THIS STATE, known to the trade and public as such, and selling to the

    27 user or consumer, and not for resale.

    3 HB10-1193

    1 SECTION 2. 39-21-112, Colorado Revised Statutes, is amended

    2 BY THE ADDITION OF A NEW SUBSECTION to read:

    3 39-21-112. Duties and powers of executive director.

    4 (3.5) (a) IF ANY OUT-OF-STATE RETAILER REFUSES VOLUNTARILY TO

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

    6 SECTION WHEN REQUESTED BY THE EXECUTIVE DIRECTOR OF THE

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

    8 REPRESENTATIVE, THE EXECUTIVE DIRECTOR, BY SUBPOENA ISSUED UNDER

    9 THE EXECUTIVE DIRECTOR’S HAND, MAY REQUIRE THE ATTENDANCE OF

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

    11 ANY OF THE FOREGOING INFORMATION IN THE OUT-OF-STATE RETAILER’S

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

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

    14 RESPOND TO SAID SUBPOENA AND GIVE TESTIMONY, THE EXECUTIVE

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

    16 STATE OF COLORADO FOR AN ATTACHMENT AGAINST THE OUT-OF-STATE

    17 RETAILER AS FOR CONTEMPT, AND SAID JUDGE MAY CAUSE ARREST OF

    18 SUCH PERSON, AND UPON HEARING, SAID JUDGE HAS, FOR THE PURPOSE OF

    19 ENFORCING OBEDIENCE TO THE REQUIREMENTS OF SAID SUBPOENA, POWER

    20 TO MAKE SUCH ORDER AS, IN HIS OR HER DISCRETION, HE OR SHE DEEMS

    21 CONSISTENT WITH THE LAW FOR PUNISHMENT OF CONTEMPTS.

    22 (b) FOR PURPOSES OF THIS SUBSECTION (3.5), “RETAILER” SHALL

    23 HAVE THE SAME MEANING AS SET FORTH IN SECTION 39-26-102 (8).

    24 SECTION 3. Safety clause. The general assembly hereby finds,

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

    26 preservation of the public peace, health, and safety.

    4 HB10-1193

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