Friday, November 5, 2010

Will the new General Assembly repeal Colorado’s “Amazon tax”?

Repealing the so-called “Amazon tax” from last year’s legislative session could be among the first priorities of the new General Assembly in January because of two important changes from last year: power in the House of Representatives has shifted to Republicans, and a recent court ruling in Washington could portend good fortune for a similar lawsuit filed against the collection of Internet sales taxes here in Colorado. Critics of the measure dubbed House Bill 10-1193 the “Amazon tax” because is one of the chief retailers that would be affected by the new regulations.

The legislation that passed in 2010 lifted the long-standing sales-tax exemption on Internet purchases in which the retailer is outside Colorado. While retailers cannot be forced to collect sales tax on behalf of a state in which they do not have a physical presence, the Colorado law seeks to compel retailers of a certain size to provide the Department of Revenue with a yearly report on the total amount of an individual’s purchases on which sales tax was not collected.

A recent federal court ruling in Washington said collecting a customer’s purchase information, and delivering that information to a government agency, violates a customer’s privacy rights. The court ruling even prompted the Denver Post, during a busy election season, to use a portion of its editorial pages to argue for repeal of the tax, saying, “…until Congress finds a national solution to the problem, we worry Colorado’s attempt likely will lead to lengthy court battles and headaches for taxpayers.” While filed the suit against North Carolina, the Direct Marketing Association (DMA) has filed suit against Colorado’s Department of Revenue.    More -

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