March 08, 2010 11:12 PM UTC

A Lesson To The Others

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• by: Colorado Pols

UPDATE #2: Don’t get mad, send emails! Click here to contact Amazon.com and then select the “email” tab.

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UPDATE: Video response from Sen. John Morse after the jump.

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Local participants in the Amazon.com Associates Program woke up this morning to an interesting and, we have little doubt, most upsetting email:

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…

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill.

As you probably already realize, this is not about any actual hardship involved in the collection of a small percentage in sales tax or generating reports on sales, which Amazon is fully equipped to do–and already does where required. Colorado, as you’re aware, is just one of an overwhelming majority of states experiencing crippling budget shortfalls in the present economic downturn. Online retail sales have skirted most state and local sales taxes ever since the industry’s inception, and have now grown to the point where not only is that advantage no longer necessary, but online retail sales are flourishing while traditional brick-and-mortar retailers go out of business.

Bottom line: this is about exacting a punitive political toll on elected officials in Colorado who voted to enforce collection of tax on online purchases, and a deterrent to other states who may be considering similar action. If we were an ex-Amazon Associate, we’d be taking a longer view: do you like being a pawn for Amazon.com’s leg up on your corner bookstore? Exactly how long does the online retail sales industry need a competitive advantage over local business? Should states leave revenue on the table while their own retail economies decline?

You’re not supposed to be thinking about any of that, of course. You’re just supposed to get mad.

(h/t shrubhugger)