Heartland Statement on Amazon Tax Decision in Colorado

January 28, 2011
Jim Lakely

U.S. District Judge Robert Blackburn this week issued a preliminary injunction that keeps Colorado from enforcing a 2010 law imposing tax reporting requirements on out-of-state retailers like Overstock and Amazon. The decision could prove to be a landmark in the dispute over the taxation of the Internet.

The following statements by budget and tax experts at The Heartland Institute may be used for attribution.

Bruce Edward Walker, managing editor of InfoTech & Telecom News:

“The U.S. District Court’s injunctive decision is terrific news for Overstock.com, but more important, for the people of Colorado and that too-often neglected document we like to call the U.S. Constitution, which prohibits such blatant discrimination against out-of-state retailers.

“What’s bewildering is the fact so many legislators persist in committing such unabashed acts of malfeasance in order to cover their spendthrift ways. I only hope the wisdom displayed by the District Court in the Colorado case prevails in other states where these taxes are either proposed or, like New York, already imposed.”

For more comments, contact Bruce Edward Walker at bwalker@heartland.org or 989/430-5557.

Steve Stanek, research fellow for budget and tax policy at The Heartland Institute and managing editor of Budget & Tax News:

“I think the privacy aspect of this is as important as the tax aspect. This law would have had Internet retailers acting as spies. If a person buys something from a bricks-and-mortar store, no one reports that person to the government. Yet this law required Internet retailers to report individuals who make purchases.

“If Colorado were truly serious about ensuring people pay the taxes they owe, they’d pass a law requiring all Colorado retailers – online and traditional – to demand proof of residency from each purchaser and report out-of-staters to the revenue departments of their home state. And, for good measure, they’d seal Colorado’s borders and check every car and truck that tries to enter for newly purchased items.

“This law wasn’t about tax fairness. It was about a state government trying to grab more tax money for itself, avoid tax competition with other states, and protect traditional in-state retailers from non-traditional out-of-state retailers.”

For additional comment, contact Steve Stanek at sstanek@heartland.org or call 815/385-5602.

The Heartland Institute is a 27-year-old national nonprofit organization based in Chicago. Its mission is to discover, develop, and promote free-market solutions to social and economic problems. For more information, visit our Web site at http://www.heartland.org or call 312/377-4000.