Earlier today Amazon stated that it was dropping affiliates in Colorado due to the passage of HB1193. This bill, also know as the software tax bill, requires any company with “sufficient connections” to the state of Colorado to withhold state sales tax. While the Governor of our State says that this has leveled the playing field, in my opinion it has cost many people their jobs and done more to hurt our state than help it.
Just because someone lists products on a website does not, in my opinion, give rise to significant ties in the state. If the state really wants to increase its tax base, I am sure there are better ways than charging a sales tax on affiliate marketing – especially as it now appears that any tax dollars that were to be gained have been lost as other companies as sure to follow Amazon and also leave our state. Without any affiliate marketers in the state, not only does the state not get the sales tax it was thinking it would but now also gains more unemployed people who use to make their money this way – which is not the type of gains it wants. It appears to be a lose-lose situation.
Hopefully, the voters in Colorado will speak up against this and the other tax bills foolishly making their way through with their votes this year. And, hopefully, those that come next season will attempt to undo the damage that has been done.