News Brief: District Court Blocks Colorado’s version of the Amazon Tax

U.S. District Court Judge Robert Blackburn has issued a preliminary injunction against Colorado’s version of the Amazon Tax. The new law stemmed from bill HB 1193 sponsored by State Representative John “Jack” Pommer which Governor Bill Ritter heralded upon signing as a landmark measure.

The bill passed despite heavy opposition by Amazon and the Performance Marketing Association. Shortly after it’s passage, Amazon, the main target of the bill, quickly terminated its affiliate relationships in the state. Originally the bill started as a clone of similar anti-affiliate laws like those passed by New York but morphed into a convoluted mess as it tried to exempt affiliates from being terminated by merchants.

The law in its final state imposes uniquely burdensome and unconstitutional reporting requirements for in-state sales for out of state merchants. Requirements include retailers who don’t collect state sales tax in Colorado to send their customers an annual notice of how much tax the they owe to the state. It also requires the merchants to provide the Colorado Department of Revenue a list of customers who spend more than $500 in a year with the retailer.

Judge Blackburn granted the injunction on behalf of the Direct Marketing Association which filed suit against the legislation in June.