SALE AND TAXATION OF GOODS OVER THE INTERNET

Colorado's Amended Amazon Tax

What is different?

While the original bill passed in Colorado was more similar to that of New York and North Carolina, it was recently amended to instead either force customers to pay sales tax on online purchases, or require online retailers to send annual notices to the customers telling them to pay the tax themselves.

To help enforce the law, the bill would allow the state to require online retailers with annual sales greater than $100,000 to provide a list of summarizing what each resident bought last year.  The amended law requires not only to record the amount of sales tax, but also include the date of the purchase, the category of the purchase, and if available, whether or not the purchase is exempt or not exempt from taxation.  

  • This raises privacy concerns in that a list of what purchases an individual made would be available.
  • The burden to collect all this tax information falls onto the retailer
  • Ultimately, Amazon.com chose to do none of these options, and just pulled out of its affiliate program like it did in North Carolina

Colorado House Bill 1193 (amending 39-26-102 & 39-21-112)

(a) IF ANY RETAILER THAT DOES NOT COLLECT COLORADO SALES TAX REFUSES VOLUNTARILY TO FURNISH ANY OF THE INFORMATION SPECIFIED IN SUBSECTION (1) OF THIS SECTION WHEN REQUESTED BY THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE OR HIS OR HER EMPLOYEE, AGENT, OR REPRESENTATIVE, THE EXECUTIVE DIRECTOR, BY SUBPOENA ISSUED UNDER THE EXECUTIVE DIRECTOR'S HAND, MAY REQUIRE THE ATTENDANCE OF THE RETAILER AND THE PRODUCTION BY HIM OR HER OF ANY OF THE FOREGOING INFORMATION IN THE RETAILER'S POSSESSION AND MAY ADMINISTER AN OATH TO HIM OR HER AND TAKE HIS OR HER TESTIMONY. IF THE RETAILER FAILS OR REFUSES TO RESPOND TO SAID SUBPOENA AND GIVE TESTIMONY, THE EXECUTIVE DIRECTOR MAY APPLY TO ANY JUDGE OF THE DISTRICT COURT OF THE STATE OF COLORADO TO ENFORCE SUCH SUBPOENA BY ANY APPROPRIATE ORDER, INCLUDING, IF APPROPRIATE, AN ATTACHMENT AGAINST THE RETAILER AS FOR CONTEMPT, AND UPON HEARING, SAID JUDGE HAS, FOR THE PURPOSE OF ENFORCING OBEDIENCE TO THE REQUIREMENTS OF SAID SUBPOENA, POWER TO MAKE SUCH ORDER AS, IN HIS OR HER DISCRETION, HE OR SHE DEEMS CONSISTENT WITH THE LAW FOR PUNISHMENT OF CONTEMPTS.

(b) FOR PURPOSES OF THIS SUBSECTION (3.5), "RETAILER" SHALL HAVE THE SAME MEANING AS SET FORTH IN SECTION 39-26-102 (8).

(c) (I) EACH RETAILER THAT DOES NOT COLLECT COLORADO SALES TAX SHALL NOTIFY COLORADO PURCHASERS THAT SALES OR USE TAX IS DUE ON CERTAIN PURCHASES MADE FROM THE RETAILER AND THAT THE STATE OF COLORADO REQUIRES THE PURCHASER TO FILE A SALES OR USE TAX RETURN.

(II) FAILURE TO PROVIDE THE NOTICE REQUIRED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (c) SHALL SUBJECT THE RETAILER TO A PENALTY OF FIVE DOLLARS FOR EACH SUCH FAILURE, UNLESS THE RETAILER SHOWS REASONABLE CAUSE FOR SUCH FAILURE.

(d) (I) (A) EACH RETAILER THAT DOES NOT COLLECT COLORADO SALES TAX SHALL SEND NOTIFICATION TO ALL COLORADO PURCHASERS BY JANUARY 31 OF EACH YEAR SHOWING SUCH INFORMATION AS THE COLORADO DEPARTMENT OF REVENUE SHALL REQUIRE BY RULE AND THE TOTAL AMOUNT PAID BY THE PURCHASER FOR COLORADO PURCHASES MADE FROM THE RETAILER IN THE PREVIOUS CALENDAR YEAR. SUCH NOTIFICATION SHALL INCLUDE, IF AVAILABLE, THE DATES OF PURCHASES, THE AMOUNTS OF EACH PURCHASE, AND THE CATEGORY OF THE PURCHASE, INCLUDING, IF KNOWN BY THE RETAILER, WHETHER THE PURCHASE IS EXEMPT OR NOT EXEMPT FROM TAXATION. THE NOTIFICATION SHALL STATE THAT THE STATE OF COLORADO REQUIRES A SALES OR USE TAX RETURN TO BE FILED AND SALES OR USE TAX PAID ON CERTAIN COLORADO PURCHASES MADE BY THE PURCHASER FROM THE RETAILER.