use tax

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.

Amazon battles new use tax assault

State-level bureaucrats in the United States have their eyes fixed on
Amazon and other online retailers. The reason: online shopping, in
theory, results in less tax revenue for their states because these
retailers don’t collect sales tax in states in which they have no
physical presence.

Up until now, a number of states have sought to force Amazon and others
to collect sales tax through legislation that would use in-state
affiliates to create ‘nexus‘. With nexus established, online retailers
would be legally responsible for collecting sales tax.