I live in Colorado and have an eBay store. What changes do I need to make (if any) to comply with this new regulation? Do I have to collect taxes on ALL my sales because I'm doing business in Colorado or just on the transactions within the state?
I do not have a business license and do not currently collect any taxes, my gross sales are currently less than $200 per month (things have been slow so $200 is on the EXTREME side.)
How does this affect me now and how will it affect me if I obtain a license in the future?
Any insight would be greatly appreciated - Thank You!
Colorado Internet Retail Tax Bill HB 10 1193 - How will this affect my eBay store?
Unless you are getting an income stream via affiliate marketing with an out-of-state partner such as Amazon.com it won't directly affect you.
The bill, as I interpret it, would make %26quot;click-through%26quot; sales by an out-of-state seller to a CO resident taxable through that seller. Essentially it's trying to establish a CO nexus through the clickable link on your web page.
The principal impact on CO retailers who depend upon this click-stream revenue is that some of the bullies in the market (Amazon for example) have been threatening to cancel their marketing partnerships if the bill becomes law. They have done so in a couple of states with similar laws (Rhode Island and North Carolina) and are trying to whip FUD among CO retailers that they face the same loss of revenue if the bill becomes law.
Several things remain to be settled in the courts. The first of course is whether a link on a web page (particularly one hosted outside of the state) can establish a nexus for sales tax purposes. This will probably wind up in the Supreme Court eventually. Another is the wording of the marketing contracts that allows the partner (Amazon) to cancel the click-stream contract because of a change in state law that makes a previously non-taxable sale subject to CO sales taxes. My gut tells me that that will wind up as a tangle class action suits that make attorneys rich but won't return much to the beneficiaries of the lost revenue streams.
