Amazon doesn’t like to collect sales tax, so when Colorado began requiring the company to report sales to customers in its state, Amazon canceled the Amazon Associates affiliate accounts based in that state.
The affiliates collect a small commission when clicks from their Web site result in a sale at Amazon’s site. So, this isn’t home-based bookstores who ship inventory in-state — these are merely people who have a Web site and advertise Amazon links on it. One other state, New York, is working this angle, too, as a way of boosting sales tax revenue.
In the Wall Street Journal, Colorado’s governor said,
While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process.
Here’s the e-mail that Amazon sent to Colorado affiliates:
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
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3 Comments
Is there no end to the greed of these politicians? Colorado has no more claim on the Associates’ revenue than I do. We are more and more being taxed and swindled, our money stolen, to support a piggish lazy worthless state and federal parasitic bureaucracy.
(Many new taxes are disguised. The craze to put in red light speed traps and to raise parking and driving tickets is nothing more than disguised new/increases taxes)
What they don’t seem to understand is that every time they jack up taxes or tax new realms of commerce, they kill another piece of the economy. The result is that there are lower revenues for the fat cats, as well as pain & damage to the “peasants”.
You would not believe how long ive been googling for something like this. Through 7 pages of Yahoo results couldnt find diddly squat. First page of bing. There was this…. Really have to start using it more often!