Colorado has made the news recently as the latest state to adopt the “Amazon” tax. That’s bad enough, but Colorado has their own twist that has the potential to affect everyone. And, that’s not in a good way.
Let’s start with what the ‘Amazon’ tax actually is. New York was the first to come up with the idea to attribute nexus to any company that had an affiliate who lived in New York. That meant a California based company who had no other tie to New York, suddenly had nexus, at least for sales tax purposes if they had an affiliate in New York. Amazon was the first to say ‘no way’ because they didn’t want the headaches. They promptly fired all of their affiliates. Other big guys like Overstock soon followed suit. (If you have a website and don’t monitor where your affiliates live, you might want to do that SOON!)
So Colorado has jumped on the band wagon. But read the law carefully because there is another gotcha. In the case of Colorado, it’s not just if you use an affiliate marketer. According to the CO law, if you sell ANYTHING to someone who lives in Colorado, you have to send them a notice that they have to pay Use Tax. And, at the end of the year, you need to provide Colorado with their information.
This law makes you an alliance with Colorado in their scheme to monitor their residents.
I don’t like it. How about you?