EcommerceBytes-NewsFlash, Number 3141 - August 29, 2013     2 of 3

Merchants, Beware Online Sales Made to Colorado

By David A. Utter

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The debate rages on regarding the collection of online sales taxes, as states that are desperate to collect any revenue legitimately due them work on revising their own laws to ensure compliance. The most noteworthy federal legislation regarding the matter, the Marketplace Fairness Act, (MFA) is currently being considered in the House of Representatives after passing the Senate.

The House may draft legislation similar to the MFA, but states aren't eager to wait for this. Many like California now require businesses to collect sales taxes from visiting consumers regardless of whether the business has a physical locus in the buyer's home state.

Consumers in states with sales taxes have always been required to pay such taxes, but enforcement (itself a costly effort for states hurting for cash) has been lax. New laws like California's put the collection burden on the retailer.

Meanwhile the state of Colorado has been working on getting its own online sales tax legislation into place. A federal appeals court reversed a ruling against Colorado's proposed law that had sidelined that bill in 2012.

However, Colorado has a little something extra baked into its bill, according to the Post:

...the Amazon law requires non-collecting online retailers whose gross sales in Colorado exceed $100,000 to mail annual notices to residents who purchased more than $500 in goods from them during the preceding calendar year.

The e-tailer must also file annual reports with the Colorado Department of Revenue that include consumers' names, addresses and the amount of goods they purchased during the previous year.

Laws like the Colorado bill and similar legislation have struck a chord with House Republicans who oppose the current MFA. House Rep. Ron DeSantis (R-FL) criticized the Senate in May for passing the MFA.

"Why would any small business in Florida want to be the tax collector for the bloated welfare state of California or Illinois," DeSantis said. He also faulted Senators for "forcing small businesses to collect taxes for states in which they have no physical presence and thus no way to hold elected officials accountable."

About the author:

David A. Utter is a freelance writer based in Lexington, KY. He has covered technology topics from search to security to online business and has been quoted in places like ZDNet and BusinessWeek. He considers his appearance on NPR's "All Things Considered" with long-time host Robert Siegel a delightful highlight. Send your tips to and find him on Twitter @davidautter and on LinkedIn.

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