Colorado Democrat tax scheme hits home
by Rossputin | 6:51 am, March 12, 2010 | Comments Off
I had recently signed up for the Amazon Associates program by which I would try to “monetize” a bit of value from my web site traffic by hosting some ads for Amazon.com on my site, being paid for “click-thrus”. Specifically, I would have hosted links/ads for books I like or live, and think important or entertaining, such as some of the books I’ve reviewed on these pages.
On Monday, I received the following e-mail from Amazon Associates:
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
My take is the following: The original legislation, before the Dems changed the words to the current law, would have said that having Associates in Colorado would be taken to mean that Amazon has a physical presence in Colorado and that all Amazon.com sales in Colorado would then be subject to state sales tax. Amazon understands that this is really where the legislature wants to go and doesn’t want to take the chance even though the legislation is written to appear to apply to multi-chain corporations where some chain(s) operate in Colorado and some don’t.
Amazon wasn’t fooled by the legislation…and neither were readers of these pages, nor many of the other fine conservative or libertarian Colorado blogs who discussed the issue.
Not that I ever expected to make a lot of money from my Amazon Associates participation, but let’s just think about the effect that the legislation has already had: Amazon will avoid being trapped by the legislation, so the state will collect no sales tax from Coloradoans’ purchases from Amazon.com. However, think of who is hurt by the fact that my Associates account was closed.
I lost the opportunity for income. I and my readers lost the opportunity for me to easily guide my readers to buy books that they might enjoy or find important. The publishers and authors lost potential profits/royalties from book sales. Fewer book sales cost jobs at publishing houses. And so on…
I am not trying to overstate my obviously limited impact in this story. But in the aggregate, killing all Colorado Amazon Associates account probably does add to to something measurable.
It’s only liberals who believe that people won’t change their behavior when regulations and taxes change. It’s only a liberal who could have thought that their bone-headed law would have not caused every business which could avoid being trapped by it to do just that.
Because of their utter inability to cut state spending across the board, as rationally suggested by Colorado Republican legislators, the Democrats have done damage to citizens of their state and elsewhere.
Let them reap the whirlwind in November…and let the next legislature repeal this idiotic law (along with the “dirty dozen” tax increases passed with the signature of Lame Duck Bill Ritter.)
