State’s Internet tax bill no longer affects Amazon

DENVER – Don’t call it the Amazon tax anymore.

Changes to a bill on Internet sales taxes mean it will no longer affect the country’s biggest online seller, Amazon.com.

Democrats unveiled a top-to-bottom rewrite of the bill at its first hearing Wednesday, but they say the aim is the same: fairness for Colorado businesses. Local business complain they have to collect sales taxes, while big online sellers like Amazon do not.

“There is no reason an online-only business should enjoy an exemption,” said the sponsor, Rep. Angela Williams, D-Denver. “A sale is a sale, whether it’s online or in a store.”

But Colorado hasn’t been able to force out-of-state Internet stores to collect sales taxes because the U.S. Supreme Court has said there must be a nexus between a business and a state.

Williams’ House Bill 1269 attempts to broaden the state’s nexus to online sellers. But Wednesday’s rewrite means it will not apply to Amazon – as least not yet.

Under the bill, Amazon would have a nexus if it opened a distribution center in Colorado, something it has done in other states but not here, said Phil Horowitz, a Department of Revenue official. Sponsors originally wanted to establish a nexus through independent bloggers who use their pages to link to Amazon and other sites. But they deleted reference to “affiliate marketers” out of fears that Internet sites would rather fire their affiliates than pay sales taxes.

The bill declares that online businesses are presumed to have a nexus to Colorado, but the businesses can dispute it when the state comes to collect taxes.

The House Finance Committee put off a vote for a later date.