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Affiliates Say Colorado Law Cripples Online Booksellers

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April 1 – April 8, 2010 Edition Affiliates Say Colorado Law Cripples Online Booksellers

AUTHORLINK NEWS/4/1/2010-A post on the website, ChristianWritingToday.com reports that the passage of a State of Colorado sales tax law is financially crippling 4,200 Amazon.com affiliates in their state who otherwise would have made $37.5 million (2008 figures) from Amazon.com.

The law requires online retailers to either collect sales tax or share information with the state about all purchases made by residents, so that it can require them to pay a use tax in the state. Amazon.com has flatly refused to comply and has pulled out of its affiliates program there.

Many states are now trying to enforce or install online sales tax laws as a source of revenues that could dramatically beef up their depleted coffers.

By killing the goose that lays golden eggs Colorado is not getting any sales tax from Amazon.com, nor is it getting any income tax from the $37.5 million worth of sales generated by the Colorado affiliates, said Donald L. Hughes, who authored the article on Christian Retail.

"Politicians seem clueless about how their money grab affects e-commerce," he said. The Wall Street Journal quoted Colorado Governor Bill Ritter as saying, "Amazon has taken a disappointing-and completely unjustified-step of ending its relationship with associates. While Amazon is blaming a new state law for its action, the fact is that Amazon is simply trying to avoid compliance with Colorado law and is unfairly punishing Colorado businesses in the process.

"In reality, citizens believe they are already paying enough taxes and don't like the new ones being cooked-up by politicians. The only group agreeing with the politicians seems to be local booksellers who do not feel they can compete with the Amazon.com business model or their pricing policies," he said. Nineteen Colorado booksellers, along with the American Booksellers Association (ABA) and Mountains and Plains Independent Booksellers Association (MBPIA) wrote to Governor Bill Ritter to thank him for publicly criticizing Amazon.com's decision and urge his continued support of HB10-1193, as pressure from Republican legislators grows against the measure.