Here in Colorado we’ve been battling a greedy bill from the state legislation that sought to tax all affiliate transactions by establishing a “nexus” for tax with any company that had any affiliate that sold more than $100 from that state. Effectively it would mean that all but the most unsuccessful of affiliate programs would then require those merchants to not only pay Colorado state tax on all transactions, but figure out that tax on a per city/county basis. From what I’ve heard, that’s over 400 tax zones in the state.
We fought it, I wrote letters to my representatives, and many of my friends camped out and testified in hearings, but it was obvious from their reports back to me that the zeal to raise money through closing a perceived tax “loophole” was greater than their interest in hearing how affilate merchants would leave the state, effectively meaning that there’d be no revenue and we affiliates would be screwed in the process.
The bill passed in a modified form, but Amazon.com’s Affiliate team still thinks it’s too onerous and as of today my account is shut down with them for the foreseeable future. Here’s the email I — and may other Coloradans — received:
In a nutshell, Amazon believes that the sales tax isn’t that onerous (indeed, the rise of Internet commerce has drastically affected tax revenue on transactions, as I have written about before) but that having to worry about hundreds of different taxation zones, and being potentially audited by any and all of these zones, is ridiculous.
Really, it’s something that we need to address on a Federal level. We need a Federal online sales tax that is then distributed through some sort of formula so that it’s easy to compute, easy to distribute, and helps alleviate the tax burden that brick and mortar stores face in an increasingly digital age.
Until then, well, Governor Ritter, I sure don’t appreciate losing a revenue stream because of short-sighted greed in the legislature. I encourage you and the rest of the Colorado legislatures to reconsider the issue of implementing HB-1193 and tweak it before more and more affiliates drop us hard-working small businesses or we are forced to change our corporate headquarters to be in another state that is more Internet business friendly.