The legislative session keeps roiling along, with many already weary people commenting that it feels as if we should be at the end of the 120-day session, rather than only at the midpoint.
It’s a year when, not surprisingly, all seem to long to move away from the constant stream of controversies and flaring tempers in nearly every corner of the Capitol.
This week, the hottest topic for legislators and constituents had to do with the tax bill affecting Internet retailers doing business in Colorado. This has been referred to as the Amazon.com bill. Amazon terminated its contracts with people in Colorado who have Web sites that led visitors from their Web sites to Amazon’s Web site. The hosts of the referring Web sites are called “affiliates” and got paid for making those connections to Amazon and this connection made the new law applicable to retailers like Amazon.
House Bill 1193 was one of the tax bills we heard in House Finance Committee. It was rammed through the legislative process and signed quickly by the governor when we arrived for the new session. I knew nothing about the affiliate businesses that were out there, but I learned a lot through their testimony to the committee about what they do, how they get paid and why they were worried this bill would cost them their jobs.
I consciously shop at locally-owned stores as much as possible, whether it’s for my books, my cup of tea, my clothing or sports gear. I also shop online. However, it hadn’t ever occurred to me to file a Colorado use tax return for past online purchases. It’s true that state tax is owed for online purchases and there ought to be a way for consumers, and the state, to handle that quickly and efficiently. But, this bill certainly doesn’t provide anything resembling quick, efficient or cost effective.
The administrative burden imposed by this bill on out of state online retailers with affiliates is huge. They, including Amazon, told us that before the votes and bill amendments didn’t fix that.
The amount of sales tax that we were told would be collected by this bill seemed unbelievably high to me. The number of state employees who would be needed to deal with the new paperwork required and to force compliance with the taxpayers seemed vastly underestimated. The invasion of privacy issues tied to the bill are huge; if you aren’t a fan of the Patriot Act, you really won’t like the new reporting requirements about your online purchases.
I didn’t like the bill at all and didn’t think my constituents would either, if they knew all of the problems with it. I voted against the bill in committee and on the floor.
Since some have asked, my views are this: Should there be sales tax collected from online sales? Sure. Should it be done state by state with different approaches? No, as this puts enforcing states like Colorado at a competitive disadvantage. Should the consumer have an efficient way to comply with the law and pay their sales taxes when they buy the item? Absolutely, but this bill doesn’t provide for that.
Moving on, I’d like to share with you something printed on the back of a note card given to me by someone whom I’ve always considered to be a deep and challenging thinker.
His note card reads, “A Thought From Governor Richard Lamm: ‘In the end, more than they wanted freedom, they wanted security. They wanted a comfortable life and they lost it all — security, comfort, and freedom. When the Athenians finally wanted not to give to society, but for society to give to them, when the freedom they wished for most was freedom from responsibility, then Athens ceased to be free.’— Edith Hamilton.”
I’ve reread this many times and it strikes me as an especially interesting and timely quote for all of us to consider.