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Colorado should rethink its tattletale tax reporting law

There is a lot of talk in the state Legislature these days about taxes — from tax hikes on marijuana and new taxes for improved transportation to reduced taxes on business personal property and even eliminating taxes on some personal hygiene products.

However, lawmakers may want to add one more tax-related issue to this robust debate — a re-examination of rules that would make the Department of Revenue privy to the personal online shopping habits of Coloradans.

Six years ago, state lawmakers addressed the internet sales tax issue through legislation. It was a fatally flawed law, aimed at increasing collection of sales and use taxes for purchases made online or through catalogs. Lurking in that bill was a dangerous intrusion into the private lives of Colorado citizens.

Read More at the Colorado Statesman

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Hoosier Internet sales tax bill is ill advised

The U.S. Constitution and Supreme Court precedent protect Indiana’s businesses from the scourge of Chicago and New York tax collectors.

Today, Indiana businesses, whether selling online, over the phone or via catalog, only must collect sales taxes for purchases to Indiana consumers. The businesses only must file taxes with the Indiana tax collectors and face audits from Indiana auditors.

As a result, Indiana’s main street businesses, such as Burton’s Maple Syrup in Medora, easily can use the Internet to reach customers across the country.

But it appears some lawmakers in Indianapolis are prepared to upend these protections and expose Indiana businesses to tax collectors from across the country.

Read more at Northwest Indiana Times 

Internet Retailer - The online sales tax may see new life in Congress

Steve DelBianco, executive director of NetChoice, a group that represents e-retailers and actively champions the Online Sales Tax Simplification Act option, says he expects Congress to resurrect prior legislation. “There is not yet movement towards a compromise bill, so I would expect reintroduction of each of the alternatives,” he says.

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POLITICO - Morning Tax: NOT A FAN

Eight out of 10 people in Colorado aren’t big fans of a law that forces retailers to tell the state government about purchases made from them, in order to ensure that use taxes on those purchases are made. Two-thirds of people in Colorado also say the law violates their privacy, according to the survey from Morar Consulting of 500 residents. (The survey was sponsored by NetChoice, which opposes the law.) The Supreme Court brushed aside the opportunity to consider the law late last year — and to re-examine the precedent that bars states from collecting sales taxes from businesses without a physical presence.

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BNA Bloomberg - Most Colorado Residents Oppose Reporting Law: NetChoice

“Colorado consumers are in for a rude privacy shock when this law goes into full effect,” Steve DelBianco, NetChoice Executive Director, said in a statement. “In many cases, linking a particular retailer to a specific customer will give the state information on that individual’s health concerns, political leanings, sexual orientation, personal tastes, and financial circumstances.”

By collecting and reporting shipping addresses, the state will learn when Colorado consumers have their purchases delivered to a different address than where they live, “potentially revealing personal and very private relationships,” DelBianco said.

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Boston Business Journal - Retail groups blast Baker sales tax gambit as ‘budget gimmick’

Boston Business Journal – Retail groups blast Baker sales tax gambit as ‘budget gimmick’

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Overstock, Others Will Report, Not Collect Colorado Tax

BNA Bloomberg – Overstock, Others Will Report, Not Collect Colorado Tax

By Tripp Baltz

Two major internet retail companies said they will comply with Colorado’s reporting and notice law, but won’t go further to collect and remit the state’s sales and use taxes on remote sales.       

High-ranking executives at the companies—Overstock.com Inc., one of the top 50 online retailers in the country, and Colony Brands Inc., one of the top 200—told Bloomberg BNA they wouldn’t be coerced into collecting and remitting sales and use taxes in Colorado, a state where they have no physical presence. Some interests had thought the reporting requirement might motivate companies to go ahead and collect the taxes as well, but the  executives said otherwise.

“Overstock will not be voluntarily collecting and remitting in a state where we don’t have physical presence,” Jonathan Johnson, chairman of the board at Overstock.com, told Bloomberg BNA Jan. 19. “We’ll report to the state and give notice. We’re not going to do something voluntarily that we think is wrong.”

“It’s pretty black and white to us this is blatantly unconstitutional, and flies in the face of the interstate commerce clause,” said Don Hughes, chief financial officer at Colony Brands Inc. in Monroe, Wis. “We’re not going to comply with taxation without representation.” Read more

BNA Bloomberg - High Court May Soon See South Dakota Online Sales Tax Case

Another state-court case has been on hold pending the federal proceedings—the American Catalog Mailers Association and NetChoice brought suit last April challenging the facial constitutionality of S.B. 106.

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Martindale.com - Colorado: US Supreme Court Leaves Notice and Reporting Requirement Intact

Similarly, Bloomberg pointed to a statement by the executive director of NetChoice, in which he expressed concern that because the Supreme Court did not choose to take on the DMA case, “states will now be unrestrained in passing new ‘tattletale reporting’ laws that force online and catalog retailers to report personal information and purchase data to state tax collectors.”

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State Tax Notes Names NetChoice as Organization of the Year

This week State Tax Notes named NetChoice and NCSL as “Organizations of the Year.”

In a world in which federal and state officials are debating ways to regulate and tax online commerce, NetChoice is at the forefront of the loyal opposition.

State Tax Notes recognizes NetChoice for its role in fighting proposals that fly in the face of its goal of “promoting convenience, choice and commerce on the net.

In the state remote sales tax arena, NetChoice moved quickly to sue South Dakota even before S.B. 106, the state’s remote sales tax bill, took effect May 1. On April 29 NetChoice joined the American Catalog Mailers Association to sue the state on the basis that S.B. 106 is facially unconstitutional.

NetChoice has been a consistent presence on the remote sales tax issue. It has fought diligently against efforts to pass legislation such as the Marketplace Fairness Act, a proposed federal law that would allow states to require remote sellers to collect and remit sales tax. Read more