One can argue about the utility and fairness of sales taxes on Internet commerce. But it is hard to argue that sales will be under greater pressure now that the prices for virtually all Amazon products now are going to cost buyers more.
Amazon says the problem is that the Colorado law increases regulatory compliance burdens in an attempt to induce Amazon to collect sales taxes, something it says it will not do.
For that reason, Amazon will stop paying commissions to Colorado-based associates for providing leads that turn into sales, and will shift such payments to partners in other states, or will sell directly from the Amazon site.
"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," Amazon says.
"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," Amazon says.
Associates in Colorado have had their accounts closed as of March 8, 2010.
North Carolina and Hawaii also have levied similar taxes on sales of Amazon products made from affiliated in-state Web sites. The taxes apparently do not cover sales made directly from Amazon's own site.
"The sad irony of this issue is that the 'Amazon Tax,' as the North Carolina General Assembly calls it, will not collect any taxes; it will only cause lost revenue for North Carolina businesses," says Bob Butler, BestThinking.com CEO, a former Amazon affiliate based in Cary, N.C.
New Taxes on Amazon in Colorado
