Internet tax debate needs fair solution
A federal appeals court ruled earlier this month that a lower court overstepped its jurisdiction in tossing out the 2010 law last year.
The law requires online retailers to collect Colorado's 2.9 percent tax on purchases, the same as brick-and-mortar stores.
Last year, a federal judge permanently blocked Colorado from enforcing the law because it placed an "undue burden on interstate commerce."
The primary reason for not requiring sales taxes for products sold across state lines is that it was just too complicated. Having to juggle the various sales-tax laws and amounts for all 45 states that have sales tax was seen as a burden on businesses. But with advancing technology, some argue, it would be less of a burden.
Big-box retailers such as Target, the National Retail Federation, e-commerce powerhouse Amazon, small brick-and- mortar business, a mix of Republicans and Democrats and President Obama are in favor of this tax.
Online marketplace eBay is leading the charge against the tax, which could impact its many sellers who conduct out-of-state business. In a letter to eBay sellers, chief executive John Donahoe suggested the law should exempt any business with fewer than 50 employees or that makes less than $10 million a year on out-of-state sales.
At the federal level, lawmakers are considering the Marketplace Fairness Act, which would allow states to collect sales taxes from online retailers regardless of whether they have a physical presence in the state.
While it is appealing to not pay taxes, it's only fair to brick-and-mortar stores that their online competition be required to collect taxes on new goods. Still, we would like to see exemptions for small retailers, who might find the cost of upgrading their tax software and hiring additional people to run it to be prohibitive.
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