Amazon: Play fair, support school funding
Thanks to CEA members’ hard work, the Legislature passed a package of bills in February that eliminate or suspend special interest giveaways. The bills will help generate revenue for the state — money we hope will keep the Legislature from cutting public schools as deep as lawmakers might otherwise consider.
One of the bills, HB 1193, requires Internet retailers to collect sales tax or at least alert their customers to the sales tax liability associated with online purchases. Retailers with a brick-and-mortar presence Colorado, regardless if they also have a online presence, are already required by state law to collect sales tax. HB 1193 simply extended that requirement to online retailers without a physical presence in the state, such as Amazon.com.
In reaction to HB 1193’s passage, Amazon.com, one of the largest online retailers on earth, fired all its Colorado affiliates: the web sites that drive business to Amazon.com through links and ads. This happened despite Amazon having done tax-free business in Colorado forever and despite lawmakers helping Amazon’s affiliates by leaving them out of the bill.
In other words, Amazon firing its affiliates does nothing to impact the fact that Amazon.com is still required to collect sales tax or, at a minimum alert their customers to this requirement under state law. The giant retailer is using its political weight to protest losing its tax-free status and having to compete on par with other Colorado retailers.
Why should you care? Because sales tax revenues fund public schools. A portion of all sales tax revenue goes into the State Education fund, the first source for nearly all K-12 public education programs, from the state’s share of Total Program to funding for full-day kindergarten.
By ensuring that all companies doing business in Colorado collect sales tax from retail sales, we are ensuring that revenue continues to flow into the State Education Fund. By creating a more level playing field for Colorado companies to compete with online retail giants, we are helping support local companies — this also raises property and income tax revenues that help fund public education.
If you want more information about this issue, visit The Colorado Fiscal Policy Institute, a friend of CEA and public education, at http://coloradopolicymatters.blogspot.com/.