Thursday, March 11, 2010

More on Amazon vs. Colorado Sales Tax

Booksellers Urge Colorado Governor to Back Online Sales Tax

Jim Milliot -- repritned with permission of Publishers Weekly

A group of Colorado independent booksellers as well as the ABA and Mountains and Plains Independent Booksellers Association have sent a letter to Colorado governor Bill Ritter urging him to continue to support the new online sales tax that resulted in the decision by Amazon to drop its affiliates program in that state Monday. Amazon's actions "are nothing short of outrageous coming after the state's good faith efforts to fashion a compromise that sought to take into account the affiliates' concerns," the groups wrote in their letter. In a separate statement, ABA CEO Oren Teicher said ABA was using the affiliates to try and change the law. "The fact that Amazon refuses to comply with this law is a clear indication that the retailing giant is only interested in maintaining its significant competitive advantage over the bricks-and-mortar retailers in the state -- and that it is more than willing to use its online affiliates as pawns to do so," said Teicher.

Colorado's law differs from those passed by a number of other states, such as New York, that states that an affiliate network creates the necessary nexus for Amazon to collect sales tax. Rather the Colorado law asks out-of-state retailers that do not collect and remit sales tax to inform residents of the amount of use tax that they owe for online purchases and to provide year-end statements to the Colorado Revenue Department. Amazon said it was not prepared to go down that road, which it said would force it to eventually collect the tax.

In the letter to the governor, the groups stress: "Our argument is not now, nor has it ever been, with online affiliates. If the amended bill had worked to level the playing field for us and had saved online affiliates important sales commissions, then it was win-win, which we would have supported. After the bill's passage, our only request had been that our legislators monitor the situation to determine if use tax revenue was being collected.

"Unfortunately, despite the best intentions of the Senate Finance Committee, Amazon went ahead and fired its affiliates anyway. With its latest salvo, it is manifestly clear that will oppose any efforts to enforce existing sales tax laws and that legislators' efforts to bend over backwards to placate this corporate giant in an effort to shield in-state affiliate businesses are pointless."

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