Posts tagged with Colorado

Colorado's online use tax reporting law ruled unconstitutional

When Colorado politicians pushed an affiliate tax designed to bolster their state's revenue on the back of out-of-state retailers, one thing was certain: the effort would backfire.

After all, we've known for years that states which have tried to find a way to collect sales tax on out-of-state internet sales fail to raise revenue.

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The fight against Colorado's internet tax law goes to court

Earlier this year, affiliate marketers and other groups successfully beat back legislation in Colorado that would have required etailers like Amazon.com to collect sales tax for purchases made by Colorado residents if the etailers had affiliates in Colorado.

But Colorado didn't simply give up on its effort to find new sources of revenue: it passed a bill, 10-1193, that went into effect in March. That bill requires out-of-state retailers with more than $100,000 in sales to Colorado residents to notify their Colorado customers that they must disclose their purchases to the state and pay the state any appropriate sales or use tax.

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Amazon uses Colorado affiliates as political pawns

Affiliates in the United States increasingly find themselves at the center of a battle pitting bankrupt state governments against major online retailers. The battle revolves around the thorny issue of state sales tax, and when online retailers are required to collect them.

Recently, affiliate marketers in Colorado were able to get language involving affiliates removed from a tax bill. Had the language not been removed, online retailers with Colorado affiliates would have been on the hook for collecting Colorado sales tax.

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Affiliate taxes don't work, states continue to pursue them

Thanks in large part to massive budget shortfalls, a number of state governments in the U.S. have pushed for so-called 'affiliate taxes'. The idea is simple: by changing the laws so that online retailers with in-state affiliates are on the hook for collecting state sales tax, lawmakers believe they can increase revenue for their states' coffers.

For the most part, large online retailers have refused to play ball. Amazon, for instance, has cut off affiliates in states that have adopted, or contemplated adopting, affiliate taxes. Others have followed Amazon's lead.

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