Amazon.com Opts Out of Colorado Sales Tax Initiative

Online retailer Amazon.com has announced they will no longer advertise through Colorado-based affiliates, as a direct response to a recent Colorado law change that would have otherwise imposed burdensome sales tax collection or reporting rules on it.

"On Monday, Amazon sent an email to members of its associates program, who earn a fee for providing links to the online retailer on their own Web sites. "As a result of the new law," Amazon said, "we have decided to stop advertising through associates based in Colorado."

Last month, Colorado's governor signed into law a regulation that requires online retailers to either collect sales tax or share information with the state about all of the purchases made by residents, ostensibly so that it can require those citizens to pay so-called use tax on the purchases."

Amazon's reaction is understandable. They simply refuse to be deputized by Colorado to haul in more tax revenue for the state.

Predictably, Colorado Governor Bill Ritter is more than a little annoyed that Amazon is not cooperating with his grandiose plan:

"Amazon has taken a disappointing—and completely unjustified—step. Amazon is simply trying to avoid compliance with Colorado law."

Actually Governor, by no longer advertising through affiliates in the state, Amazon is not subject to the new collection and reporting standards. By effectively choosing to "opt out" of the new law by changing the way it does business, Amazon is exercising its hard-nosed business prerogative to organize its affairs in the most tax-efficient manner.