Amazon Fires It’s Colorado Associates
The Colorado legislation titled HB-10- 1193 was recently passed and signed by Governor Ritter. Governor Ritter willingly signed the legislation that has caused many residents to be fired by Amazon as independent advertisers of Amazon products.
The bill was a put together in a dim witted fashion that produced the predicted elimination of a significant source of income for thousands of Colorado residents. The legislature decided to obtain revenue by taxing the retail sales generated on the internet by Colorado advertisers. These advertisers are typically home based businesses that use various on line strategies to attract attention to products sold by Amazon and other Internet retailers.
The home based business’s, called Amazon Associates, are paid a small commission by the retailer for sales generated by their advertising efforts. The income is generally a small income supplement but some Associates have generated enough traffic and notice to make enough money to have this as their primary source of income.
Amazon and other retailers have made it clear that they are not against paying a tax on products sold in Colorado or other states. The point that Amazon has made is that the bill is not structured in a manner consistent with the Constitution. They further have clearly indicated that the bill requires activities by Amazon that will make their program unable to operate profitably in Colorado. They followed up on their warning that they would eliminate The Amazon Associates program in Colorado if the bill was passed.
Testimony by Internet marketing experts clearly warned the legislature and Governor Ritter what would happen if they passed this bill. The warnings were ignored and Ritter once again earned his reputation of never seeing a tax possibility that he wouldn’t embrace. He and his party have steadfastly pursued increases in taxes where ever an opportunity presents itself. This is a case where Amazon, the major on-line retailer in America has decided not to do any Associate business with Colorado residents. Colorado residents can still go on line and buy Amazon products. Amazon Associates in other states will advertise the products on line and derive the commissions. Colorado will derive no tax benefits from Amazon on these sales.
The bill will not gain significant taxes and has put thousand of Colorado residents out of doing on-line business. Dim witted might not be strong enough as a description of the Colorado legislative activity on this matter.
The Denver Post might be shouting huzzahs over this bill but they can save their breath.
Advertisers are not going to replace Amazon and the Internet with a return to advertising in the newspaper. The Internet has a reach that the Colorado Legislature , the governor and newspapers do not understand. With HB 10-1193 the legislature and the governor have shot themselves in the foot again. Unfortunately they also have wounded the thousands of Amazon Associates in Colorado by putting them out of business which happened when Bill Ritter signed this bill
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It must have been the medical marijuana talking.
The problem with the anti-business attitude is that they forget that there are only two categories of people in this country. Those who produce taxes and those who consume them. Even if you work a government job, you are consuming tax because it is not about your personal income tax. It is about where the money came from to pay the salary in the first place. Only business generates tax revenue and Colorado has just lost part of that tax base. They will loose a lot more money than they will see coming in from those new taxes.
Heath