Colorado Affiliates Thanks to Affiliate Tax — Amazon.com Fires

Amazon states “see you later” to Colorado’s affiliate merchants. Thank inept state representatives.

Colorado is the latest state to exacerbate unemployment problems by effectively canning its affiliate marketers.

Colorado has joined a list of states that either proposed or enacted rules that make web firms collect sale tax if they have affiliates operating in the state. In the case of Colorado, HB 10-1193 didn’t necessarily require Amazon.com to collect sales tax. Instead, it upped the compliance burden on Amazon.com, making it just as costly.

As I’ve pointed out ahead of, such “affiliate taxes” actually lower a state’s tax revenue. The e-commerce merchant usually cuts the state’s affiliates rather than deal with the sales tax. So the state doesn’t end up getting the sales tax. Also, it lowers the income of the state’s affiliate marketers, lowering state income tax revenues.

(Hat tip Bruno Falconi)