Colorado Politics

Survey: Coloradans want state to butt out of their e-transactions

If you buy online – and who doesn’t? – you may owe back taxes on your purchases and not even know it. What’s more, the state’s tax collectors may already have the information they need to track you down.

A long-standing U.S. Supreme Court ruling says a state may collect sales tax on online transactions only for vendors that have a physical presence in that state – a retail storefront, a warehouse or a call center, for example. Yet, like most states, Colorado requires e-retailers to collect tax on sales in the state even if they have no brick-and-mortar location or employees here.

The 2010 statute gets around the Supreme Court standard by allowing a theoretical option: Either collect sales taxes or share with the state’s taxing authorities basic information on Colorado shoppers’ purchases. That way the state can hold the shoppers themselves responsible for forking over the sales tax they owe.

A new state-by-state survey conducted by a trade association representing e-commerce businesses concludes that Coloradans overwhelmingly oppose the requirement. The survey by the group NetChoice found 78 percent of respondents say the state government should not force businesses to turn over the information on internet purchases. And 68 percent say the policy – NetChoice dubs it a “tattletale law” – is bad for consumers.

A NetChoice press release quotes Executive Director Steve DelBianco as saying, “In many cases, linking a particular retailer to a specific customer will give the state information on that individual’s health concerns, political leanings, sexual orientation, personal tastes, and financial circumstances.”

The press release also quotes Colorado Senate Majority Leader Chris Holbert, R-Parker:

“This polling shows the majority of the citizens in Colorado are deeply concerned about their online purchases and privacy…The online purchases from Colorado citizens should be protected information – which our current online purchase law does not protect.”

Some other findings of the survey:

Sixty-seven percent said the Colorado law violates their expectation of privacy from government intrusion into their online and catalog purchases.  Eight-four (84) percent said that when making online purchases, their privacy is “very important” and another 14 percent said it is “somewhat important.”  Only 2 percent of Coloradans indicated privacy was not an important factor.

Meanwhile, 60 percent said they consider the law’s intent equivalent to a statewide tax increase.  Two of three Coloradans said the state should not attempt to regulate online businesses located in other states and force them to report on their Colorado customers.

A growing list of states use some semblance of Colorado’s approach to internet sales taxation, the Tax Policy Center’s Richard C. Auxier recently told CNBC. However, that doesn’t necessarily mean sales taxes actually are being collected in all or even most cases, he said. As CNBC notes:

In reality, states haven’t been particularly stringent about collecting these use taxes – and many shoppers don’t even know they owe.

“Very few taxpayers report it, even when systems are in place to make use tax payments easy,” said Auxier.

 

 

 

 

 



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