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March 4th, 2010, 02:14 PM #1Information for merchants dropping affiliates out of ignorance...
Following jgoode post here (merchants dropping Colorado affiliates out of ignorance?):
Originally Posted by jgoode
Here is an article that summarizes the situation pretty simply:
The "cleanest" solution might be to collect sales taxes. Another solution appears to be to display information to customers reminding them to remit a tax payment to the Colorado IRS.
Many are waiting to see what the big merchants will do (Amazon, Overstock etc...).
Note: None of the big merchants have dropped affiliates in Colorado, while the law "started" a few days ago already (March 1 2010).
Last edited by delsol; March 4th, 2010 at 02:26 PM.
March 8th, 2010, 03:35 AM #2
Originally Posted by delsol
- Join Date
- January 17th, 2005
March 8th, 2010, 04:35 AM #3
was kind of worried when I saw the bill passed w/changes.
Personally, I'm tired of seeing all the >>>Victory In Colorado!<<< stuff.
Victory? not so much.
March 8th, 2010, 05:15 AM #4
- Join Date
- January 18th, 2005
- Nunya, Business
That's what I was trying to say in post 88 and 89 - http://forum.abestweb.com/showthread...808#post995808
The bill wasn't defeated, it was changed but read just like New York's where hundreds of merchants dropped affiliates. This article made me sick - http://www.forbes.com/2010/02/25/col...hopathome.html
Sorry it happened to you guys.
March 8th, 2010, 07:25 AM #5
I also tried to urge caution in regards to what some called "a victory". It was and still is my opinion that the Co law is worse than any other version. Of course my expressing that opinion was not popular.
Amazon's decision does not surprise me. During testimony they said they would terminate Affiliates in any state passing legislation that they felt was unconstitutional. They followed through. If they backed down it would give less credibility to the threat of removal in other states who seek to pass their version of an Internet sales tax.
Whether or not their action removes the need for notification/ yearly statements is not clear.
What this does do, is add to the need for Federal action.
March 8th, 2010, 10:03 AM #6
So sorry to hear that Colorado affiliates are the scapegoats for this legislation. I feel for you.
March 8th, 2010, 10:42 AM #7
I think it is important here that we don't blame the affiliates who fought in Colorado. That group, all of them, fought their tails off and endured unending hearings on this issue... At the end of that, it was clear that the law intended to remove affiliate marketers from this battle. That was the intent.
I feel terrible for my friends and everyone in Colorado that is now facing this ... if there is anything I can do for you please email me and I'll help in any way I can.Thanks,
President/CEO - ShareASale.com, Inc.
March 8th, 2010, 11:50 AM #8
March 8th, 2010, 12:14 PM #9
- Join Date
- January 18th, 2005
I hadn't been following the Colorado "twist" recently, but I am disappointed in the conclusion.
The state basically recognized that if it sought to impose its authority unconstitutionally on out-of-state merchants, by using the "pretext" of in-state advertising, then those out-of-state merchants would act to avoid the unconstitutional law. The state told its in-state web publishers that it would abandon the "pretext" langage. And then, inexplicably, the state imposed its authority unconstitutionally on out-of-state merchants. The changes were not really meaningful -- while the duty to collect and remit sales taxes was removed, the tax-computation, record-keeping, and reporting requirements (the most burdensome tasks) were not.
Basically, the state just dropped the "pretext language" (the pretense that advertising purchases can create nexus under existing law) from the bill, and instead chose to directly challenge existing U.S. Supreme Court precedent regarding nexus. The problem, of course, is that when the issue is litigated in court, the state will bring back the argument that the "in-state advertising" creates nexus to justify these new requirements.
Amazon decided to terminate its advertising relationships with Colorado web publishers ONLY after the state flatly refused to respect federal law, and chose to impose almost exactly the same burden that is imposed under the "Advertising-Nexus" tax laws in other states.
March 8th, 2010, 01:48 PM #10
I am still unsure why Amazon pulled the plug on their affiliates in Colorado. Don't they still have to provide Colorado online shoppers with the estimated tax for their purchases or does pulling their affiliates give them exemption from providing the estimated tax per purchase there?
Last edited by MichaelColey; March 8th, 2010 at 02:27 PM. Reason: Fixed Typo
March 8th, 2010, 02:51 PM #11
- Join Date
- January 18th, 2005
> "I am still unsure why Amazon pulled the plug on their affiliates in Colorado. Don't they still have to provide Colorado online shoppers with the estimated tax for their purchases or does pulling their affiliates give them exemption from providing the estimated tax per purchase there?" <
Colorado can't require an out-of-state merchant lacking "nexus" to do anything at all regarding sales tax.
The relevant U.S. Supreme Court cases prohibit states from imposing any "burdens on interstate commerce" unless authorized by Congress; the exception is that states may properly impose requirements on merchants with a "physical presence" in the state (nexus).
The "burdens" for sales-tax collection include the following:
- Registering with the state's sales-tax agency;
- Obtaining the current tax-computation information for the state and its subdivisions;
- Computing the correct amount of sales tax for a specific transaction;
- Collecting the sales tax from the customer;
- Remitting the sales tax to the state;
- Reporting sales and tax data to the state's sales-tax agency periodically;
- Periodically updating the sales-tax computation information (adjusted tax rates for the entire state or a subdivision, or changes to the categories of transactions subjet to sales tax);
- Responding to requests for additional information and/or audits by the state tax agency.
Colorado's law seeks to impose some of these burdens, but not the duty to collect and remit the sales tax. In addition, it appears that Colorado will be adding a completely new and different duty, by requiring out-of-state merchants to provide detailed information about individual purchasers and transactions. The state wants to force out-of-state merchants to become "tax enforcers."
March 8th, 2010, 03:23 PM #12
- Join Date
- March 2nd, 2007
Wow - what a mess the Colorado has done. I think Amazon did the right thing by sticking with their principles and not obey any unconstitutional laws passed by states.
Where is our Federal Govt. on this whole mess?
March 8th, 2010, 03:34 PM #13
- Join Date
- January 18th, 2005
> "Where is our Federal Govt. on this whole mess?" <
This could quickly devolve into an unpleasant political discussion -- let's not go there.
Congress has not acted. In recent years, bills have been introduced to try to "enable" the multi-state "simplified" Streamlined Sales Tax Project (SSTP), but they haven't moved forward.
Some ABW discussion threads on this issue:
March 8th, 2010, 04:02 PM #14
I STRONGLY recommend any merchants considering dropping affiliates (especially Colorado merchants)
read Melanie's post over at Affiliate Advocacy first. She makes some excellent points!
What Will Guide You
"If you are a merchant do not follow blindly. Seek qualified counsel before deciding to remove Colorado Affiliates because removing Affiliates may not remove your need to comply. Donít be guided by the actions of others without having full knowledge. Merchants, please make the decision that is right for your business and do not become a political pawn in a battle. Be guided by your own counsel and not by the actions of others. Merchants, your decisions and your actions will be seen by hundreds of thousands of affiliates. Be sure you are making educated decisions and, treat Affiliates with respect; everyone is watching."
March 8th, 2010, 11:48 PM #15Originally Posted by markwelch
March 9th, 2010, 12:54 AM #16
This sucks. SO sorry our Colorado affiliate brothers and sisters have to go through more anguish and potential loss. As stated above, this just shows that the situation is out of control and we ALL need to get involved, whether it hits our state or not (yet).
Melanie, your post to merchants is right on and excellent work. Thank you all over again for all you do!Peace,
Loving Everyone's Child Creates Magic
March 22nd, 2010, 02:23 PM #17Originally Posted by markwelch
department of revenue
mark put it in the best terms possible. Merchants are not liable to collect the taxes which is great news for merchants. Unfortunately, the End of the year we have to make a little list of all purchases out of that state through online purchases. That is the cost of doing business.
■The retailer is not obligated and does not collect Colorado sales tax
■The purchase is not exempted merely because it was made over the Internet or other remote means and
■Colorado requires that the buyer file a use tax return at the end of the year reporting all of the purchases that were not taxed and pay the tax on those purchases
■The retailer did not collect the Colorado sales tax and is obligated to provide purchaser with an end-of-year summary of purchases to assist the purchaser with filing their tax report
■ Retailers that do not collect Colorado sales tax are required by law to provide the Colorado Department of Revenue with a report of all of a purchaserís purchases at the end of the year using the Consumer Use Tax Return (DR 0252).
HB1193 isn't unreasonable. (well not if you are the resident of Colorado who makes the online purchases, you're going to get hit april 15th next year...)
I feel sorry for affiliates who were caught in the middle of this, even though from what i read. With or without affiliates in CO, merchants will still be held responsible to getting the DR0252 forms filed. The only way to avoid it is to stop selling to that state (would they do that?)
Like Mellie said:Merchants, your decisions and your actions will be seen by hundreds of thousands of affiliates. Be sure you are making educated decisions and, treat Affiliates with respect; everyone is watching.
March 22nd, 2010, 02:37 PM #18
If merchants don't have a physical presence in CO, how does the state of CO have jurisdiction to require the merchants to do anything? Whether it's collecting and remitting taxes or filling out forms, I don't see how any state has the right to hinder interstate commerce in that way.
March 22nd, 2010, 02:48 PM #19
March 29th, 2010, 01:23 PM #20
March 30th, 2010, 12:12 AM #21
Here is a "summary of the Colorado situation" from the Colorado Fiscal Policy Institute (this group claims to be none partisan but they do seem pretty partisan to me):
March 30th, 2010, 01:02 AM #22
The Colorado Fiscal Policy Institute is a project of the Colorado Center on Law and Policy, a non profit, nonpartisan research and advocacy organization promoting justice and economic security:rankn-scp John - This is our chosen profession. This is our way. This is what we do.
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