One of the Democrats’ “Dirty Dozen” tax hike bills is a measure which would change the definition of doing business in Colorado so that many sales by Internet companies would be taxable. In particular, if a retailer used a Colorado-based “affiliate” who advertises for the company, the state would try to tax any sale by the company in the state. The measure, HB 1193, passed its last state Senate committee today (and passed the state House last week). It will soon go to the full Senate for a vote.
As scary as the concept of trying to force Amazon.com to collect sales tax on many things you buy from them is, just as scary is the bill’s proposal to create a subpoena power by which the state’s Department of Revenue claims to be able to demand documents from out-of-state Internet retailers and even demand that the retailer send a person to Colorado to answer questions. Further, if that if the retailer doesn’t send the subpoenaed person, the Department of Revenue can ask a judge to issue an arrest warrant for him!
Overstock.com is already warning affiliates that the company “will have to sever relationships with Colorado Affiliates before the bill becomes law.”
I wish I were kidding you, but I’m not.
[An interesting discussion of the constitutionality and likely impact of the law can be found HERE. The bottom line is that while the law is almost certainly unconstitutional, many online retailers will likely choose to just end their affiliate programs rather than spend money on lawyers.]
And if all that isn’t enough, the Democrats are arguing that the bill “is necessary for the immediate preservation of the public peace, health, and safety.” The purpose of this “safety clause“, which Democrats are attaching to all of their tax bills, is to (1) prevent the ability of opponents of the measure from sending it to the people to vote on as a referendum, and (2) allow the bill to take effect immediately upon the governor’s signature rather than at least 90 days after the adjournment of the General Assembly (a period during which a referendum petition can be filed.)
I asked Senate Minority Leader Josh Penry “How can Dems be this stupid? They’re passing things which will possibly cost them control of both houses of the General Assembly and the governorship in 9 months…”
Senator Penry responded as follows:
I had exactly that same conversation with a Democratic friend on the floor. They will get no cash, they will cost people jobs, and they’ll put make themselves among the first in the history of humankind to make the Internet a big tax target. It’s not insanity. These people are smart. It’s arrogance.
In my view, it’s also unenforceable and probably unconstitutional. (But who cares, right?)
The Democrats are trying to pass a dozen tax hikes simply because they have no backbone when it comes to spending, particularly when it comes to the most obvious place to look: the cost of operating government. Bill Ritter hired a couple thousand government employees after he instituted a hiring freeze. Government worker salaries are going up while the rest of us are tightening our belts. This has to stop.
The Republicans in the State Senate are a group Coloradoans can generally be proud of (much more proud than Americans overall can be of those serving in our federal Senate).
Yesterday, in what struck me as someone reading my mind, the proposed the Taxpayer Protection Act of 2010, which calls for a 0.24% across the board cut in state employee compensation and then a 4.39% across the board spending cut next year, “giving first priority to eliminating non-essential and vacant government positions, and in pay cuts to state employees primarily making more than $100,000.”
The bill, which would not impact teachers, will “eliminate the need for Democrat proposals to increase taxes by $17.8 million in the current year and $306 million next year.” According to Senator Penry, the Republican proposal would also restore the senior homestead exemption and the “vendor fee.”
This is not brain surgery. Our state government has gotten unbelievably bloated under Governor Ritter, despite a fictitious hiring freeze. It’s time for government to work smarter, smaller, and more efficiently, just like most of us in the private sector must during difficult economic times. They’ve been using this appropriate quote:
“Don’t make me fire my employees so you can hire more.”
Rick Enstrom, Owner, Enstrom’s Candy, Colorado-based business
In a press conference on the measure, the Republican Senators noted that their proposed cuts are smaller than those proposed by the Democratic Governor of Montana, Brian Schweitzer, who recently ordered a 5% across-the-board cut in state agency budgets.
Even soon-to-be-unemployed Massachusetts Governor Deval Patrick has called for cutting 2,000 jobs in the Bay State.
But all our Colorado Democrats can do is try to tax internet sales, software sales and downloads, energy, soda, and candy. Remember Penry’s words: Not supid, but arrogant. I think it’s a little of both.
As Coloradoans tighten our belts while watching our Democratic government expand the size and cost of government at our expense, I believe Colorado’s Democrats are soon to reap the whirlwind.
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