Just two short weeks after Democrats in Denver and Gov. Bill Ritter railroaded a tax increase on Internet purchases into law Amazon.com is severing ties with its Colorado affiliates.
The new tax was signed into law on February 24 and will increase taxes over $100 million in the next two years. In a strongly worded letter to its Colorado-based Amazon associates, the company called the new Internet tax “burdensome".
“Now that the ruling party has decided to go it alone and tax the Internet, young, tech savvy entrepreneurs have lost a great business opportunity in Colorado,” said Sen. Greg Brophy, R-Wray. “We were afraid this would happen. It’s so unnecessary, let’s roll back the law. They can find a different way to tax the Net.”
Amazon makes is very clear the decision to stop advertising through its associates based in Colorado is a direct result of the new law. “There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way,” the letter said.
Effective today, Amazon will no longer pay advertising fees for customers referred to Amazon.com through Colorado affiliates. Amazon will continue to advertise in Colorado through other channels, including associates based in other states.
“The day that Economics 101 was being taught, the Democrats must have been absent,” said Senate Minority Leader Josh Penry, R-Grand Junction. “When government raises taxes in a recession, it kills jobs. Shame on the partisan Democrats in Denver for ignoring this rudimentary economic reality.”
Democrats ignored repeated warnings from statehouse Republicans that implementing a new tax on Internet purchases would kill jobs and dampen economic growth in the state. The tax on Internet purchases was one of a package of “dirty-dozen” tax increases passed by Democrats last month. In addition to raising taxes on Internet sales, the tax measures raised taxes on everything from candy and soda to agricultural compounds.