Court Enjoins Colorado Ecommerce Reporting Law

Last year Colorado passed a law requiring retailers who do not collect Colorado sales and use taxes to–

  1. “notify Colorado customers that the customer is required to pay use tax on the purchase;
  2. send an annual statement to each Colorado customer, summarizing the customer’s total annual purchases from the e-tailer; and
  3. file an annual information report with the Colorado Department of Revenue showing the total amount of sales made to each customer in Colorado.”

Colorado could then use this information to monitor residents’ compliance with state laws requiring reporting and payment of use taxes. ¬†E-Commerce Times reports that the Direct Marketing Association challenged the sale on the grounds that it discriminates against out-of-state retailers and burdens interstate commerce. ¬†Last month a federal court in Denver issued a preliminary injunction preventing the state from enforcing the law until its validity can be determined at trial.

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  4. If I were a retailer, I would want my customers to buy from me without paying tax to the government. They'll think it's like a discount.

    If I were the government, I'd be thinking about ways to reduce state/federal deficits. Oh look, a grey area in online sales not unlike catalog sales.

    If I were a judge, I'd personally just let the law get passed. The main benefit of online e-tailing shouldn't be focused on lower prices, but rather service. The type of virtual expedient service vs real personalized service are both things we can appreciate. Don't let the law pass and you'll be seeing trends of the world going more and more virtual, as the environment would be more favorable.

    This isn't a small decision. The implications could be huge. The government needs the money, and well, there are groups of consumers who really need their local mom&pop stores to stay in business.

  5. This seems like so much for work for the consumer and the seller. I feel as though it is irrelevant, and mostly unnecessary. If I was a retailer, I would not want to hire business people to do this work. It would be costly, and I don't see why this kind if thing is even being considered anyway.

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