DENVER – Democrats are back with another attempt to tax Internet sales, and this year, they are confident the courts will be on their side.
The so-called “Amazon tax” has roiled the Legislature for the last five years. Colorado passed an Internet tax law in 2010, but its status has been uncertain after it was thrown out by a federal judge, then reinstated and currently is the subject of a new lawsuit that seeks to block it again.
Colorado isn’t alone in trying to impose taxes on Internet sales. States got a big boost in December when the U.S. Supreme Court declined to review a New York law passed in 2008 to tax companies such as Amazon.com.
The high court’s decision gives Colorado lawmakers confidence that a similar law here could withstand a legal challenge, said Rep. Lois Court, D-Denver. Court and Rep. Angela Williams, D-Denver, introduced House Bill 1269 on Tuesday. It is patterned on the New York law.
“It’s really simple. Our brick-and-mortar businesses are being undermined,” Court said.
Supporters include the Colorado Retail Council, a lobbying group for local businesses.
Colorado first tried to pass a New York-style law in 2010. The New York law gets around a 1992 Supreme Court decision that disallowed state sales taxes on catalog merchants that don’t have a substantial connection to the state.
Democrats amended their 2010 bill into a complicated set of requirements for Internet businesses to notify their customers that they owe use taxes. No other state has a law quite like it.
The Direct Marketing Association has sued the state to block the law. A Denver judge is expected to decide soon whether to block the law while the trial proceeds.
Court’s bill would sidestep the legal controversy.
“This is cleaner. This is simpler for frankly the online businesses and the consumer,” Court said.
The bill has not been scheduled for a hearing yet.