

Colorado Senate Majority Leader Beards Amazon - xiaoma
http://www.youtube.com/watch?v=OXT7Fey8RiY&feature=player_embedded

======
CalmQuiet
There's an amazing amount of heat, but little light on this, particularly
regarding exactly what impact the legislation threatened to have on costs,
labor, etc. for Amz, affiliates (exactly what is that? someone selling via Amz
Marketplace?), and customers.

Huffington offers:

"The bill, which was part of a package of tax measures aimed at increasing
revenue, originally sought to create a nexus between the state and on-line
retailers based on their ties to local affiliate websites, which link to
products. The bill was ultimately altered due largely to fears that retailers
like Amazon would simply cut ties to Colorado companies that make money by
referring buyers."

"The final bill, which was signed into law in February, instead required large
online retailers to start collecting sales taxes or provide a summary of
people's web purchases in the state, leaving affiliates out of the equation.
This created an economic nexus without making local affiliates a scapegoat for
paying local sales taxes." --[http://www.huffingtonpost.com/2010/03/08/amazon-
reacts-to-co...](http://www.huffingtonpost.com/2010/03/08/amazon-reacts-to-
colorado_n_490028.html)

...but Huff doesn't cite sources. Anyone find a better analysis by a
dispassionate legal/financial source?

~~~
FluidDjango
Well, RRW says ([http://www.readwriteweb.com/start/2010/03/new-state-law-
bump...](http://www.readwriteweb.com/start/2010/03/new-state-law-bumps-
colorado-off-amazons-affiliate-map.php)):

"Online retailer Amazon has ended all Colorado-based affiliate accounts after
a new law passed by the state's legislature would have forced them to collect
and pay state sales taxes. The law, HB 10-1193, states that any affiliate
marketer making more than $10,000 for a retailer is declared a legal agent,
and a state presence, of that company. Rather than be forced to pay the state
taxes, Amazon has instead side-stepped the law by closing its doors to all
affiliates based in Colorado."

...though I think they're sloppy, too, speaking of Amazon being "forced to pay
the state taxes" - when they seemingly would have to begin to _collect_ sales
taxes from customers, which could mean: • Figuring out the tax rate (which
varies by city, county, etc) for each customer. • Charge a differential price
to customers depending on the state/co/city of residence. • Either increase
the charge to customer's CC or cut Amazon (or it's affiliate's) net on a sale.
• Send on the $ to state gov.

Sounds to me like they just don't want hassle and cost of programming,
processing etc.

Note another effect: When I buy a $2500 laptop from Apple online, I have
consider the cost of where I want it shipped. If it goes to my office in town,
I pay ~3% more sales tax than if I they ship to my out-in-county home.

If Apple can handle all that, so can Amazon, but if this is what the CO law
will impose on national online retailers it will mean lots more issues for
both customer and seller to weigh and start handling _immediately_.

Maybe it's equitable, but I sure wouldn't like to have to have all _my_
business's billing software rewritten overnight.

~~~
HoneyAndSilicon
From what RWW says further down, Amazon must already have the software in
place - and be collecting it in NY state:

"The Colorado legislature should have foreseen this outcome - it's not the
first time Amazon has been forced to shut down affiliate programs. In July of
2009, Amazon closed off their programs in Rhode Island and North Carolina, and
has previously sued over a law passed in New York in 2008. The suit, however,
was eventually thrown out and Amazon has since been paying taxes for New York
affiliates they feel are too valuable to give up."

So I still don't see why Amazon is choosing to fight this battle with Colorado
:/

------
xiaoma
Before watching this, I hadn't realized that

1) Others, such as B&N Apple have been complying with the burdensome
regulations

2) The law in question has no actual connection to Amazon Associates, and
canceling the Associate program doesn't actually save Amazon anything on sales
taxes.

~~~
DanielBMarkham
Not to be cynical, but does any of that change the fact that Amazon chose not
to do business in Colorado with affiliates? Or that hundreds of Colorado
affiliates are now out of a sales channel?

Must be some logical reason in there somewhere for Amazon. And I doubt this
guy is going to explain it.

~~~
xiaoma
If you're as big as Amazon, retaliation might be a logical reason. Doing this
_does_ cause political problems for Democrats in CO, and it also lowers the
income of CO affiliates, thus directly decreasing state income taxes and
indirectly decreasing sales taxes, property taxes and anything else Coloradan
affiliates might spend on.

This sort of retaliation will definitely be on the minds of the legislature of
the next mid-sized state to consider doing something Amazon doesn't like.

~~~
DanielBMarkham
Retaliation for _what_? According to this guy, it doesn't affect Amazon.

~~~
nfnaaron
As I understand it, Amazon and others are required to collect purchase
summaries and send that to Colorado, so that Colorado can collect (or
enforce?) sales tax for online purchases.

So, it looks to me like Amazon is objecting to collecting the information and
sending it to Colorado. My opinion is their public objection is to the
administrative cost of doing this, but their real objection is erosion of
their cost advantage, since the collection of information will lead to more
tax collection by Colorado, resulting in a real cost increase to customers for
Amazon products in Colorado.

Affiliates, which apparently have nothing to do with it, are merely a
convenient, minuscule and vocal group for Amazon to throw under the bus.

As a vocal former Colorado Amazon affiliate, may I just mention that Tattered
Cover, <http://tatteredcover.com/> , is an excellent, large, Colorado (that
ships nationally), independent book seller. They also have an affiliate
program: <http://tatteredcover.com/affiliate>

I'm just sayin'.

------
ExJournalist
I have trouble taking that state senator too seriously.

He's clearly outraged about "being bullied" by Amazon...

but it's less clear that he has done an cool-headed analysis of the impact of
the legislation on all parties (Amazon, affliates, customers, state treasury).

