Colorado Tax Law Causes Amazon.Com to Flee; Governor Ritter Passes Buck

March 10th, 2010 · 1 Comment

Taxes have consequences.

WebCPA reports that Amazon.com has severed ties with affiliates in Colorado in response to a Colorado law that requires Web retailers to send statements to their customers apprising them of their use tax liability on online purchases:

“The regulations are burdensome and no other state has similar rules,” the company wrote in an e-mail to the sites informing them of the move. “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.”

Naturally, Amazon.com is being faulted by Colorado politicians for making this business decision:

Colorado Governor Bill Ritter criticized Amazon’s decision. “Amazon has taken a disappointing — and completely unjustified — step of ending its relationship with associates,” he said in a statement. “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.”

Wrong, Governor. You, not Amazon.com, have unfairly punished Colorado businesses by passing a law that you should have known would cause Amazon to do business in other states where the costs of doing business are lower.

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