Big Win For Amazon In Colorado

Cash strapped states looking to collect revenue from online retailers have run into a fairly sizable obstacle – The United States Constitution. A federal court in Colorado issued a preliminary injunction blocking the enforcement of a new Colorado tax law intended to help the state collect revenue from online retailers. Although the legislation did not mention Amazon by name (and the case was actually brought on behalf of as trade group called the Direct Marketing Association) the law was nicknamed the “Amazon Tax” in recognition of the impact of that online retailer. Although a state court in New York had upheld similar legislation in November, a North Carolina court had previously agreed with Amazon, and blocked efforts by that state’s taxing authority to gather customer names. The Colorado based federal court ruled that “the Act and the Regulations impose … burdens on out-of-state retailers who have no connection with Colorado customers other than by common carrier or the United States mail.” And that constitutes an unconstitutional burden on interstate commerce. Don’t be surprised if this issue makes it to the Supreme Court. Colorado Governor John Hickenlooper (that’s really his name) probably speaks for many states when he asks: “Is it fair that local bookstores are getting beat up over these sales on the Internet? There should be a national way of collecting sales tax, of leveling the playing field.”