Jan 30, 2011 3:33 AM by John Romero

State Legislators in showdown over "Amazon Tax"

Sides are being drawn over the states so called "Amazon Tax". The bill passed by the 2010 Legislature says online retail giants like Amazon would be required to either start collecting state sales taxes, or provide the state with a summary of customers' web purchases. Wednesday, a federal judge blocked the tax, setting up a political showdown in the legislature and in the courts.

Democrat John Morse, the State Senate Majority Leader, says the tax, supported by Democrats, makes things fair for small businesses in the state. "Those that are physically here have to collect sales tax. The giant corporations that are out of state don't have to." he explains, "So the object was to level that playing field so that everybody had to provide us with a mechanism to be able to collect this tax."

As a result of the tax, Amazon cut ties with thousands of paid affiliates in Colorado. Republican Amy Stephens, the House Majority Leader says the tax went too far. "You're either going to allow people to invade their privacy and give away their private information to the government in order to, you know, collect them." she says.

Alan Hazlett has owned Camera Works in Colorado Springs for 20 years. His store competes directly with Amazon. He says the current system is unfair to small business. "It hurts local merchants." he says, "It's a 7.4% disadvantage to us because we have to charge the tax. There's no way around it and we can't absorb it." Hazlett would support a system that would force big online retailers to tax. For him, it's all a matter of everyone doing their part to bring money into the state. "There should be a way to fairly appropriate taxes between people who are buying their stuff over the internet and people who are buying it locally." he explains, "Everybody should pay their share."



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