Bad Colorado legislation forces Amazon.com to cancel Colorado-based Amazon Associates
Due to recent legislation enacted by Colorado politicians and Governor Bill Ritter requiring a new and unprecedented internet sales tax to be collected for internet sales transacted within the state of Colorado, as of today Amazon.com has cancelled all Colorado-based Amazon Associates (a.k.a. affiliates).
Thanks to a very bad move by Colorado legislators, those of us who earn a living off the internet are now struggling even more since this new legislation will be crippling to online sales for Colorado, and crippling to Colorado business. This legislation is bad not only regarding lost revenue for Colorado from Amazon.com sales, but lost revenue from many types of online sales since internet shoppers will simply buy from online sources other than Colorado-based sales that are not burdened with this unique online sales tax.
No internet shopper is going to buy a product that carries with it a sales tax when they can buy a product from any other state that does not have an online sales tax. In fact, online shoppers won't even have the option since Colorado-based Amazon Associates have cancelled our Amazon account and will not allow online sales from Colorado (with other online retailers probably soon to follow).
This can't be good for Colorado! What was Bill Ritter thinking? Leave it to Colorado Democrats to add a higher tax burden that will adversely impact revenue for the state of Colorado and put an unfair tax burden on small business.
Here is an excerpt from an email we received today from Amazon regarding cancelling our affiliate account with Amazon due to this new Colorado legislation:
"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.
Many in Colorado, after being laid off due to the struggling economy and finding it hard to find decent work in Colorado, have started a small business. With weather conditions throughout Colorado often making long commutes unthinkable, working from home seems to make a lot of sense. Unfortunately with this new legislation working from home makes less 'cents'.
Our business was counting on revenue from the Amazon affiliate program to help generate income through an online store featuring Amazon products. In fact, we've already invested thousands of dollars for a website that sells Amazon products using Amazon's affiliate program, only to find that now our Amazon account has been cancelled.
We really don't blame Amazon for cancelling Colorado-based Amazon Associates. We feel it would be too hard for Amazon to manage the exception of Colorado-based sales when 49 other states don't operate this way.
In fact, we're not sure as an internet retailer and affiliate marketer that we would be able to manage collecting and managing sales taxes "voluntarily" as Colorado legislature now requires without getting into some tax liability problems with our business. What a headache!
Though there may be some practical reasons why Amazon made this dramatic move, ultimately we see this as more of a political move by Amazon to try to send a message to legislatures at all levels to not mess with current tax laws regarding online purchases.
Unfortunately it is doubtfull that this message will carry any weight in the political arena, especially as far as Colorado is concerned. This situation tends to show that Amazon considers their Affiliate Marketers as nothing more than useless pawns being sent to the front lines as acceptable collateral damage.
Colorado is the only state in the union where we can't earn an income from Amazon.com as internet marketers. And this unfortunate scenario is likely to carry over to many other online retailers and suppliers we do business with as an affiliate, which is how many Coloradan's make a living. We find this to be a pathetic resolution to Colorado government's struggling attempt to capture revenue.
This new legislation needs to be repealed, and quickly!
Not from Colorado? All internet merchants, internet marketers, online ecommerce stores, etailers, online marketers, affiliate marketers, etc. should be very afraid.
If this type of unfair legislation can be imposed upon internet merchants in Colorado, it can happen anywhere, and just might if we don't all do something about it now.
We look forward to comments from all Coloradan's, the Denver-metro community, and all those affected by this bad law.