I'm a bit taken aback by the Governor's statement. Why do people (politicians or otherwise) complain or act surprised when companies make completely rational moves to protect themselves (or further their own interests) based on legislation? It's pretty altruistic thinking to make changes to the law that would adversely affect a company and then act baffled when that company decides to take their ball and go home. That kind of reaction means one is either completely out of touch with common sense, or they knew it would happen all along and just don't want to admit it because it makes them look bad.

And – minor thing, but one nonetheless – for as long as we locate Glue or Defrag (or any other technology conference) in Colorado, Amazon is refusing to send people to participate in the event….a loss of speaker talent (like Werner Voegels) and sponsor dollars (and hotel room nights and and and).

I'd assume it also precludes AWS from ever making a purchase of a Colorado-based software startups. (and, no, i don't blame Amazon at all.)

Repeal obviously will be a lot cheaper and quicker than a legal challenge. Perhaps the assembly will come to its collective senses in the next day or two. Denver News 4 covering this issue at 6PM.

Is there any information available as to how many businesses are affected by this and to what extent? Would be interesting to see Amazon give some stats. Hopefully not too many people are relying on the Amazon associate program for their entire income…

I'll also be interested to see if any other affiliate programs follow suit.

Thats outrageous behavior on Amazon's part – Amazon should not penalize the citizens of Colorado for something that our stupid governor did.

I do not blame Amazon for their decision to pull out affiliate business, but fully blame them for acting childish in not sending their employees to Colorado conferences – thats bullcrap.

I would not buy from Amazon till they stop acting irrationally and ban speakers from speaking at Colorado based events. Others should do the same.

There is a right way to protest and wrong way to protest – by not sending people to Colorado conferences, Amazon is behaving in the wrong way.

As a former ecommerce site owner, the logistics of dealing with sales tax are incredibly complex, given the various local and county taxes. The streamlined sales tax process aims to correct this, but it, too, has its issues (and is still a work in progress). And while Amazon is in a better position than small ecommerce sites to implement the changes necessary to track sales tax, that doesn't mean they somehow 'owe it to Colorado' to take a loss.

Especially when *not* taking a stand on the matter will lead to more and more states doing the same thing. In that regard, Amazon made a smart move in cutting out the middle man.

The saddest part about this to me is the ignorance of the free market displayed by Gov. Ritter in his response. Amazon is only looking out for the interest of its shareholders – it's pretty simple, really, to see that this would happen.

And of course, the ultimate result – CO consumers still buy from Amazon, the affiliates lose a revenue stream, and the state gains none of the projected tax revenue as a result. An all-around lose-lose situation. Shame.

To me, this is all to be expected when state and local governments are allowed to demand that out-of-state businesses collect their taxes for them. Why the tax isn't levied at the seller's location rather than the buyer's never really made sense to me. Oh wait, because it's easier to tax businesses whose votes you don't need.

To me, this is looking like a year when the Democrats lose the state back to the Republicans.

Sounds like you're in need of a new political perspective.

This is probably the only argument that will get their attention.

actually, my (limited) understanding is that their lawyers advised them not to travel into the state because it would set some weird precedent that could then be used against them in such tax cases. again – for the record – i'm clueless about such things — just imparting what i know.

I'm sorry, but I couldn't disagree more. I agree that sales tax regulations are far too complicated, but there are plenty of resources available to manage this process. However, the point here is that Amazon.com has an unfair advantage over local retailers as long as they can avoid collecting sales tax.

Colorado closed the loophole, and Amazon's response was a slap in the face to affiliates in Colorado. We didn't deserve to be fired.

It's important to note that Amazon.com has a long history of avoiding taxation – some say that their entire business model is *based* on avoiding tax. I don't know if I would go that far, but I don't think Amazon's response was fair or even a little bit appropriate. Frankly, firing me was a mistake.

I just received a reply from Sen. Rollie Heath, sponsor of HB 10-1193.

RollieHeath@aol.com wrote:
> Thanks for your comments. We took affiliates totally out of the bill at their request. Amazon simply does not want to play by the same rules as the others. I'm truly sorry that it impacts you, but we amended the bill so this would not occur. Unfortunately, we cannot control what Amazon does.
>
> Senator Rollie Heath
"Can't control what Amazon does??!!" It's your JOB to make Colorado an attractive place for companies to do business and bring money to the state! The Senator and all the legislators were warned of exactly these consequences.

Regardless of how "diversified" internet marketers are, because all other online companies are likely to follow Amazon's lead, this law just kills anyone doing anything substantial in affiliate marketing (in CO).

Amazon's statement is clear as mud. What authority does Amazon have to decide what's "constitutional" and what's not? Why isn't this explained in their notice? I say good riddance to Amazon. I've made my last purchase from or through them.

Because the Supreme Court of the United States said so
http://en.wikipedia.org/wiki/Quill_Corp._v._North…

Educated your self before you post.

Thanks for the link. My point was that they didn't explain in their notice. Seems the issue is what's a nexus: "a connected group or series." "4,200 affiliates in Colorado using the same mechanisms " isn't a "connected group or series"?

It's unfair competition for them to avoid taxes that an in-state company has to pay. Corporations will do whatever they can to avoid paying taxes … and they hope to beat Colorado into submission to provoke a race to the bottom.

Excellent comment, Jason

"Nexus" in tax issues has to do with the taxing jurisdiction. In the context of tax, it has nothing to do with "a connected group or series".

Years ago Quill defined nexus as the location of the business. That definition of nexus has quietly gone away as people everywhere pay their cell phone taxes based on where they live.

State legislators are under a gun. There are many, many challenges in the budget for years to come and no one wants to be the one that mentions cutting back on entitlements.

Well, you obviously have an axe to grind, but I'll take the bait anyway.

"Plenty of resources available to manage this process" – besides the aforementioned streamlined sales tax project (which isn't functional yet), I'm curious as to which resources you're talking about? Most people who've had to wrangle their way through sales tax realize the absurdity of that statement. Most states have state, county, municipality, and local taxes – many of which cross zipcodes. For Amazon, it's less of a problem to manage, but for a two-person startup, it's a HUGE resource drain. And that's just for one state – if this thing continues to spread to more states, we're talking hundreds of thousands of different taxes. If you don't believe me, I'd encourage you to try it yourself.

As for the 'unfair advantage', perhaps…but the ends don't justify the means. When Colorado closes the 'loophole' with a move that violates the due process clause of the Constitution, the point is hardly moot. Check out the [Quill Corp. vs. North Dakota] U.S. Supreme Court case for the precedent.

Simple fact is, Amazon did what the free market dictated it do in the face of this law change. The CO legislature decided Amazon should take one for the team, and Amazon decided not to take the loss. Altruism is not their responsibility in the face of an unconstitutional law. You may not have deserved to be fired, but they don't owe you anything (unless you have a contract stating otherwise). Especially not when Colorado is passing laws that will make it more difficult and less profitable for them to keep affiliates in Colorado. It's only natural that they cut out the part of the equation that's going to cost them more money than it would to keep it.

The inhabitants of Colorado ARE responsible for the actions of there "stupid governor" – they voted for him. It is not Amazon's fault that the majority of Coloradans elected who they did.

I can see both sides of this issue. I understand why Amazon doesn't want to deal with all the political red tape. This legislation would definitely make it more cumbersome for them to do business within the state of Colorado. I do some online retail with a couple websites, so I understand the online retailer's frustration.

But I can also see Colorado's side of this as well. I own two retail stores in the People's Republic Of Michigan. For years, my business association, as well as the Michigan Retailer's Association has been fighting to get our state to enact the Use Tax…..something people are supposed to be paying anyway but don't.

Anytime something is purchased outside of the state, people are required by law (at least in Michigan) to pay their tax on the items that are purchased out of state by claiming the purchases on their income tax return. This has been totally voluntary, but many retail associations are putting pressure on state governments to force the issue.

Your brick and mortar stores in your state applaud this legislation. The online retailers hate it. Colorado appears to be the first state to enact such legislation, but I can guarantee you, they will not be the last. States want to recoup the tax they are losing to online sales as they try to find ways to keep business within the state. I think this is just the beginning of this issue.

I'm also involved in an exploding home based business, so I'm just kind of sitting on the sideline totally playing all sides and watching the fireworks.

Wouldn't you have thought that both sides could have come together to work this out in a manner that would have been productive to all. Kind of childish that they couldn't have created this in a win/win fashion isn't it?

Governor Bill Ritter is a My Hero. I have a Retail Store & for to long the Field has not been level with the Competition. I do't want an advantage, I just want the game to be fair. Online Retailers can pay their Taxes the same as everyone else. If we can put a man on the Moon then we can collect sales taxes through Amazon or any other Website out there! I have seen Celebrities & Pro Athletes put in jail for not paying taxes then regular old Joe Blow or Josephine Blow orders something on his or her computer & has no intention of paying the tax. 5 Years ago this was not an issue but now in 2010 50% to 60% of retail is online. Politicians out there need to get their head out of the sand & show support for this Brave Governor who had the courage to do the right thing not to mention my fellow Americans!

Now I haven't read all the comments above, but what seems to be missing from the debate on CO's action is just what right the state, or any public entity, has to tax online sales. This from a fairly liberal Democrat, by the way.

Brick & mortar stores pay sales taxes because they impose issues on a government – utility costs, increased traffice and road use, etc. Online purchases pose NO additional burden on a government. Government does NOT have the right to tax something simply because it's there. Taxes should be to offset the burdens imposed by additional activity.

I get the state is in dire financial stress and needs to make tough choices. But finding new revenue options by taxing activity just because it has yet to be taxed is not right. CO hasn't forgone online sales revenues. It doesn't have the right to them. You don't lose what is not yours to begin with.

Geez, it's enough to vote Republican.

~ Scott Woodard

I’m especially disappointed in the Governor’s statement – it’s completely tone deaf to the actual issue and what Amazon is clearly stating. I’ve heard several people saying “Amazon is the problem” or “well – this is good – now people will buy locally.” Neither of these statements is valid – Amazon behaved like a rational company in the face of government regulation that had no upside for them and substantial downside. Also, this has zero impact on consumer purchasing activity as this doesn’t impact the end customer of Amazon products in any way. – I COMPLETELY AGREE. Good for Amazon.

Elections have consequences. This is what you get for voting for Democrats. I have very limited sympathy for you.

On the tax location issue… I am a retailer in California. In this state, the sales tax is the financial responsibility of the seller. When the buyer pays sales tax at the register, it is, technically, a voluntary reimbursement. This is how some retailers can have a "no sales tax" event. They simply pay the taxes as usual, but do not ask the buyer for reimbursement. Maybe, if you look up the actual tax code for CO, you may find it to be similar

Everyone must get their education. Anyone that believes in the Democrat model will get educated at some point in their lives. Conservative are always considered dense, uneducated, morons, rednecks, etc, because we want simple Constitutional regulations that are based on Free Enterprise and capitalism. This is just an example of business seeking the capitalist level fairest to them. They will always do this. Just as your employer will stop paying for your health insurance if their is a public option to force you on to some sort of Medicaid, stand in line, controlled cost for treatment, sort of system. People will find this out eventually, but it will be too late. My company has already sent me 2 notices of help to get me disabled and put on Social Security disability so I can get Medicare and they can drop my insurance. As if it would be desirable for me to get on Medicare.
Anyone over 50 can remember Carter and his debacle of a presidency. If you are under 50, well, maybe you haven't learned how close America can come to coming apart. I am afraid, this time, that we may have gone to far to the edge to pull ourselves back, and who will be the next Reagan?

I was thinking the same thing, I have a small company and was thinking to do something soon based in part on the affiliates company.

It seems that if I register my company in Delaware I can probably still join the affiliate program… I'd like to continue supporting Colorado but I guess Colorado doesn't care to support me, so it's time to break ties.

Yes, because Republicans are content to loot what is already there instead of seeking to expand the total pool of Loot.

And you never know, after a while you may be able to get enough reasonable Republicans to agree to reduce the pool.

As a small biz operating out of Co, i am glad that they passed the bill to tax internet purchases. Many of those who send their money to improve other economy as well supporting other kids school instead of your own. Those with kids of working age, How do you expect local biz to hire your kids or even you if you keep sending your money out of state. Some of you will give the excuse that you are saving money and not aware that , by doing so you are jepordising your own.
As a small biz and other biz in town pay lots of taxes every month to your city so your home value increase and other things that you demand to improve your way of life. Well how could you accomplish that if you keep doing biz out of state.

Did they let you to withdraw?
This is a shame , announcing account closed without an e-mail about the cause!

I hope this situation will not arise again.

i've read it..

This new law is completely unfair to Colorado affiliates. I hope that the government revises their business because this effectively put an end to a lot of careers!