DENVER, CO (BRAIN)—As of March 1, non-Colorado based retailers selling to Colorado customers must keep records on how much sales tax those Coloradans owe the state.
Retailers without a business presence in Colorado do not need to collect Colorado state taxes, but they have to keep their Colorado customers, and Colorado’s revenue department, apprised of purchases and tax owed.
“I’m not sure the law will survive, but it will be interesting seeing what happens,” said Clay Akey, Cambria Bicycle Outfitter’s chief executive officer. Cambria Bicycle Outfitter owns retail stores and a large mail-order business in California.
“Honestly it’s not that big of a deal, my retail shops collect sales tax and I don’t see it as a big problem for my Internet sales. I just wish they could decide on a single federal sales tax and be done with it. The problem is the complication of everyone doing its own thing,” he added.
In response to the law, Internet retail giant Amazon canceled its contract with Colorado affiliates, as did Hammacher Schlemmer & Company. The moves are more of a symbolic gesture as they still must file consumer information with Colorado’s revenue department for their
Colorado customers under the new law. Sylvane, an online retailer of air filters, stopped doing any business with Colorado customers entirely.
SmartEtailing provide e-commerce services for hundreds of specialty bicycle retailers, and co-founder Mark Graff does not think the new law will impact many of the shops the company works with.
“About 95 percent of the Internet business done by our clients is local, and they collect sales tax on those transactions. Out of state sales can be more complicated so many shops don’t chase this business. I expect the impact of the law to be minimal,” Graff said.