On Friday, Colorado House Bill HB10-1193 was introduced and referred to the Appropriations Committee. It has been reported to me that they will be holding a committee meeting on the 27. HB10-1193 has sponsors in both the Senate and the House of Representatives. Colorado Internet sales tax is inching forward.
The bill is sponsored by Representative John (“Jack”) Pommer, the Appropriations Committee Chair (he is also Chair of the Joint Budget Committee) and Senator Rollie Heath. You should also recall that Governor Ritter is in support of the Internet sales tax in order to help close a $1 billion shortfall.
After the Governor’s Budget Proposal was released earlier this month, it was unclear whether new legislation would be required. Many believed that new legislation was not needed and that the Revenue department would make what ever necessary adjustments were needed. While it is still unclear that this legislation is needed, the proposed bill is similar to the NY version. It also appears that they are hoping for a March 1 start date.
From HB10-1193
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(II) (A) COMMENCING MARCH 1, 2010, IF A RETAILER ENTERS INTO AN AGREEMENT WITH AN AFFILIATE UNDER WHICH THE AFFILIATE, FOR A COMMISSION OR OTHER CONSIDERATION, DIRECTLY OR INDIRECTLY REFERS POTENTIAL CUSTOMERS, WHETHER BY A LINK ON AN INTERNET WEB SITE OR OTHERWISE, TO THE RETAILER, THEN THE AFFILIATE SHALL BE PRESUMED TO HAVE SOLICITED BUSINESS ON BEHALF OF SUCH RETAILER AND SUCH RETAILER IS DEEMED TO BE DOING BUSINESS IN THIS STATE. THIS PRESUMPTION SHALL NOT APPLY UNLESS THE CUMULATIVE GROSS RECEIPTS FROM SALES BY THE RETAILER TO CUSTOMERS IN THE STATE WHO ARE REFERRED TO THE RETAILER BY ALL AFFILIATES WITH THIS TYPE OF AN AGREEMENT WITH THE RETAILER ARE IN EXCESS OF TEN THOUSAND DOLLARS DURING THE PRECEDING CALENDAR YEAR. THIS PRESUMPTION MAY BE REBUTTED BY PROOF THAT THE AFFILIATE WITH WHOM THE
RETAILER HAS AN AGREEMENT DID NOT ENGAGE IN ANY SOLICITATION IN THIS STATE ON BEHALF OF THE RETAILER THAT WOULD SATISFY THE NEXUS REQUIREMENT OF THE UNITED STATES CONSTITUTION DURING THE CALENDAR YEAR IN QUESTION. NOTHING IN THIS SUBPARAGRAPH (II) SHALL BE CONSTRUED TO NARROW THE SCOPE OF ANY TERM FOR PURPOSES OF THIS ARTICLE.
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If you have a chance to read the entire bill it also appears that they will be very aggressive in enforcing it; more on that in another post.
Affiliates in Colorado have hopefully been preparing their business model by examining all of their merchant relationships and identifying those that are vulnerable.
Affiliates, the most important step you can take is protecting your income by preparing. After you have prepared then you can consider fighting the legislation and reach out to your local representatives to voice your opinion on the proposed bill. I have also been informed that there will be a press conference on the 26. Please contact me if you wish to be put in touch with other affiliates from Colorado.
Appropriations Committee Members are:
Representative John (“Jack) Pommer, Chair; Representative Mark Ferrandino, Vice-Chair; Representative Kent Lambert, Ranking Republican; and Representatives- Kathleen Curry, Randy Fischer, Bob Gardner, Joel Judd, John Kefalas, James Kerr, Sal Pace, Jim Riesberg, Jerry Sonnenberg, Glenn Vaad
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