The effect of a decision made by the state of Colorado, wherein it has raised the internet sales tax has already begun to bring some very damaging results for both, the online companies as well as the users. One of the biggest online retail chains, Amazon Inc. has now withdrawn its affiliate program from Colorado, due to the increase in sales taxes and sent a notice to its users in Colorado, informing them of the situation and advising them to get in touch with the state’s lawmakers, if they wish to get the program back online.
As per the law passed by the state of Colorado, the out of state retailers such as Amazon will now have to pay a heavier sales tax for their affiliate program. The lawmakers argue that, as the Internet is intended to target everyone in the world, therefore, the sales made by the affiliates in Colorado, calls for the sales tax to be paid by Amazon Inc. However, Amazon has in fact refused to bow down to this new amendment and has withdrawn its affiliate program, stating that, it will continues to sell its products to the users in Colorado, but will engage other means of advertising, including the Amazon affiliates in other states.
According to an e-mail sent to the users by Amazon Inc,
“There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.”
This isn’t the first time that, Amazon has come across the hurdle of increased sales tax. In the year 2008, New York also passed a similar law, which was countered by Amazon with a lawsuit. On the same lines, Rhode Island and North Carolina had also issued the same law, that made Amazon withdraw its affiliates program from these two states as well.
Via CNet
