DIGITAL COLLECTION
AMAZON TO INCLUDE COLORADO SALES TAX ON PURCHASES STARTING FEB. 1.
Colorado residents will begin paying state sales tax on Amazon.com purchases starting Feb. 1.
“I can confirm that Amazon will be required to collect sales tax in Colorado beginning on Feb. 1,” an Amazon spokeswoman wrote in an e- mail to The Denver Post. She would not comment further.
With the addition of Colorado, Amazon will be collecting sales taxes on purchases from28 states. The change was first reported by the Denver Business Journal.
Colorado Department of Revenue officials confirmed Amazon’s plan to charge and remit collections from Colorado’s 2.9 percent sales tax, but declined to saywhat spurred the change. It is unclear whether Amazon will be collecting sales taxes for Colorado municipalities, spokeswoman Lynn Granger said.
“Currently, if an out- of- state retailer does not assess Colorado sales tax on online purchases made by Coloradans, consumers are required to self- report and remit use tax in lieu of sales tax for those purchases,” she said.
The collection of sales tax by online retailers has been a heavily contested issue in recent years in Colorado, where the constitutionality of its so- called “Amazon- tax law” has been challenged in court.
State law requires online retailers to track purchases made by people in Colorado and report the amount of sales tax that should have been paid. The companies also must advise the buyers of their tax obligations.
Under federal law, retailers that don’t have a presence in the state can’t be forced to collect the taxes, triggering the consumer self- reporting requirement.
Amazon began collecting sales tax last year in Ohio and Illinois. In both states, the retailer was planning to add data centers or distribution facilities. In October, Michigan residents began paying 6 percent sales tax on Amazon purchases to comply with the state’s “Main Street Fairness” law, enacted to level the playing field between Internet sellers and traditional stores.
In 2014, the Department of Revenue estimated Colorado was losing more than $170 million to online “tax leakage” annually.
The Direct Marketing Association has battled Colorado on its law since 2010. The fight moved to the U.S. Supreme Court, but in March it was sent back to federal court.
A decision is expected in the 10th Circuit Court case in the first quarter of this year, said Michael Uehlein, a spokesman for the Direct Marketing Association.
“DMA continues to spearhead a legal challenge to Colorado’s unconstitutional tax and data- collection scheme,” he said.
“Requiring out- of- state sellers to disclose private purchase information to the state’s Department of Revenue violates both the Commerce Clause, as well as the privacy of the business- to- customer relationship. DMA has won every argument in this litigation andwe are confident the 10th Circuit will support DMA’s argument.”