[Working Mom]

Does anyone know what happened today regarding HB 1193? Haven't been able to find out any results...

[Angel Djambazov]

It looks like the committee voted to pass it 6-5. HB 1193 Vote

[Trust]

That sucks, I'm reading on Twitter they had 110 affiliates show up.

[Angel Djambazov]

Just Round 1, like in California if Colorado affiliates can get organized and push there is still time to impact the legislation.

[loxly]

Originally Posted by Trust

That sucks, I'm reading on Twitter they had 110 affiliates show up.

That is a good representation! Hoping they can get coordinated and work to get it knocked down at the next level.

[Stephanie Lichtenstein]

110 is a great turnout and 6-5 is very close. CO keep it up and it will end well like in CA.

[Trust]

Just to be clear, the "that sucks" part was for the 6-5 vote, not the turnout which I thought was good. I think the 110 was the biggest turnout so far at one of these things?

[sjangro]

110 people is amazing turnout.

There's a first-hand account here: http://www.performancemarketingassoc...ked-the-house/

Sounds like the affiliate side did their best. And the 6-5 passage of the motion may not be as grim as it seems on the surface. A few of those 6 appear to have reservations, though it certainly isn't dead. Folks will be there in the morning to keep at it.

[mr_jones]

It was quite hectic. Many people were locked out to the lobby because the room was full. The crowd outside the door were often loud and had to be told to be quiet. Later from inside, I saw a state policeman walking around in the lobby and I'm not sure if he was called in for crowd control or what.

As far as I know there was seating for 100 but walls were lined with people as well. Some people were there for different bills, but it was mostly affiliates.

The bill was amended to exclude electronic marketing. The idea here was the revenue only wants target affiliates who sell face-to-face within Colorado. The example given was a pastor at church soliciting the congregation to "buy" from the church website in order to collect commissions for the church. In my opinion, the revenue representative seemed to think that taxing interstate (electronic) affiliates was not legally sound.

Two legislators said they would vote the bill through today. I think this implied they were not thrilled with the bill, and are leaving the door open to not vote for it in the future.

Another legislators who voted for it, didn't at all seem comfortable with it, but I think the vote was a done deal anyway. The budget situation, while nowhere near as bad as California, is pretty dire.

The amendment was great I thought, but I have a small operation selling nationally and internationally. One affiliate had several hundred employees, and another had 50. The question they now face is whether or not Amazon, Overstock, and others will lump all affiliates (electronic and face-to-face) in together. My thinking is that they will. If that's the case, then affiliates who depend on such merchants will suffer needlessly.

I believe the hearing started at about 2:30pm and finished at 7:00pm with an 11 minute recess to write the amendment.

Oddly enough, I enjoyed the whole process. Very interesting, and very satisfying to know that so many affiliates were there trying to make a difference.

[Rexanne]

Wow, great turnout guys! WTG!

I think there is always hope. Someone just has to get in front of those 6 who voted for this and explain exactly what the consequences would be, how the law flies in the face of interstate commerce laws already on the books and how it will affect their constituents.

In CA, we got lucky. Our governor laughed at the bill and it never got any farther. Go Arnie! :-)

[Eric Ewe]

That is great to hear about the turnout.

[delsol]

I will second mr_jones.

The crowd was so large that they bumped our bill.

I think they were surprised by the size of the crowd. Most had no clue about what an "affiliate is" is (this felt like a Bill Clinton moment). Because of the visible smartness and determination of the crowd they discretely backtracked to "re-define" what an affiliate is. Like jones said, a Colorado resident using a public place of business in Colorado like a school or church...etc... excluding electronic media (i.e internet). In other words excluding affiliates ;-)

Like Jones said the votes were a done deal. The bill was part of a group of about 10 tax "exemptions" (soda candy tax ..etc..) proposed by a democrat and all 6 democrats systematically voted for their colleague's bills.

I think the group of 11 was:
6 democrats
4 republicans
1 independent (libertarian?)

All the votes were 6/5....

The good:
Strictly speaking according to how they ammended the definition, WE internet affiliates have WON. However having the main bill talk about affiliate (without further clarification) kinda of feels weird. Many merchants might not look at the details of what affiliates means in Colorado HB 10-1193. In fact most involved in the industry would be surprised by the definition of an affiliate according to a bunch of people that do not know what an affiliate is.

I sincerely think some discovered this industry and were surprised to learn the details. For many this issue is seen as the "Amazon tax". The big mean company putting local bookstores out of business because they avoid sales taxes. I suspect that we might have made enough noise for then to take a closer look at what this bill would do for the state of Colorado.

After the hearing, I'm have sent 2 additional emails to the chair Joel Judd (http://www.joeljudd.com/) and Daniel Koagan (http://www.dankagan.com/) both democrats offering more details and my time to help them understand the dynamics at play. Daniel Koagan seem to be very knowledgeable about the concept of tax nexus. At one point a nice lady from the struggling book business said something like "I just want Amazon to pay taxes". Daniel Koagan tried to raise the point that you next a tax nexus to do that. You just can't force a company to collect taxes like that.

I think that we might have a chance at getting them to listen to what this bill would do and drop it completely.

Like Jones said a few democrats did not seem very thrilled to vote for this bill. I think those are open to understanding the consequences of this bill.

The bad:
It was nearly a caricature how they systematically vote party line. It was kind of like "wow, I did not know about all these consequences, you guys make a good points" but I will still vote for it since my party is behind the bill.

At one point the chair was implying that we are in this business to encourage people evading paying taxes. He got in a little argument with the republican representative Cheri Gerou who challenged him on that point.


If these people just see these issue as bullet point items (or red meat) for their bases (ie for democrats "The Amazon loophole tax") it will not be good since I think democrats have a majority in our state.

If they want to move forward with this bill they should modify the bill to say: affiliates that specifically use their presence in Colorado, via a physical communication in public place of Colorado. This excludes affiliates using the internet or other electronic media. But then they would be making a tax nexus with the schools, the churches and maybe a few businesses that try to cross sell using the brick and mortar stores. So now merchants would have to qualify Colorado affiliates to make sure they do not, at any time, use a physical public building to make sells for them.... Sounds a little complicated or even crazy....

Another funny point of the day was when Marc Braunstein said "I do things when they work" to which one of the representative replied "We can tell you're not a politician".
It's good to see that they humor about themselves.

[Rexanne]

Originally Posted by delsol

After the hearing, I'm have sent 2 additional emails to the chair Joel Judd (http://www.joeljudd.com/) and Daniel Koagan (http://www.dankagan.com/) both democrats offering more details and my time to help them understand the dynamics at play. Daniel Koagan seem to be very knowledgeable about the concept of tax nexus.

I think that we might have a chance at getting them to listen to what this bill would do and drop it completely.

...

Good job, delsol! This is what every CO resident in the industry should do. Once they realize what they're actually voting about, they'll likely see how stupid and basically unlawful it really is.

[Working Mom]

Wow. Thanks for the information. It seems quite a lot happened in Colorado yesterday...

[Angel Djambazov]

Mr_Jones and DelSol thank you for the thorough and very funny recounts of the session. I have one question. Both of you mention amendments to the bill but in the versions available online I don't see any reference to a cutout for electronic marketing in the language.

The bill, in its current form, still defines an affiliate as "as a person residing in this state that solicits business by means of a public forum in this state"..."by use of any communication media"..."whether by a link on an internet web site". These are all the historical versions available of this bill I can see online. Am I missing something? Just worried that the amendments are promised but not enacted.

[Kevin]

As Angel pointed out, I'm interested to see the provision that Mr. Jones pointed out in writing. I don't see that anywhere. (Not that I don't believe you, Mr. Jones )

[sjangro]

Originally Posted by Angel Djambazov

Mr_Jones and DelSol thank you for the thorough and very funny recounts of the session. I have one question. Both of you mention amendments to the bill but in the versions available online I don't see any reference to a cutout for electronic marketing in the language.

What Angel said! Great recount, guys. At the very least these stories should give folks in other states the courage to get involved in their own states.

Very interesting about the amendment, it indicates that they are actually getting it. A few other states have similar "no local solicitation" provisions that allow merchants to continue working with resident affiliates, like in NY.

Unfortunately, plenty of merchants will still be spooked by this bill even with the change, terminate affs first and ask questions later.

[mr_jones]

Am I missing something? Just worried that the amendments are promised but not enacted.

I would like to see it on record as well. There were lots of witnesses and I believe an audio recording. Plus, after the amendment was written, the pastor example was used again.

I see your point though. If incorrect documents are used for any reason, it could get messy.

[mellie]

Thanks for the update!

As others have stated the amended version does not reference that change. The only change refers to appropriations to facilitate implementation. Sometimes there is a delay in posting the final version, will check again later on.

[mr_jones]

I just phoned the Office of Legislative Legal Services and they said it should be updated later today, he mentioned 4:00pm, and if not, to call back.

[delsol]

Originally Posted by Angel Djambazov

Mr_Jones and DelSol thank you for the thorough and very funny recounts of the session. I have one question. Both of you mention amendments to the bill but in the versions available online I don't see any reference to a cutout for electronic marketing in the language.

The bill, in its current form, still defines an affiliate as "as a person residing in this state that solicits business by means of a public forum in this state"..."by use of any communication media"..."whether by a link on an internet web site". These are all the historical versions available of this bill I can see online. Am I missing something? Just worried that the amendments are promised but not enacted.

Here is the amendment (page 3).
http://www.leg.state.co.us/clics/clics2010a/csl.nsf/fsbillcont3/B30F574193882B4B872576A80026BE0C?open&file=1193appFIN.pdf

(B) FOR PURPOSES OF THIS SUBPARAGRAPH (II), "AFFILIATE"

23 MEANS A PERSON RESIDING IN THIS STATE THAT PUBLICLY, NOT INCLUDING

24 ELECTRONICALLY, SOLICIT BUSINESS BY MEANS OF THEIR PHYSICAL

25 PRESENCE IN THIS STATE.



Now the question is will merchants read this before booting affiliates?

[Essociate]

thanks for the posts & hopefully these politicians will stick with things they understand better when deciding what to legislate next.