February 11, 2010
By Tyler Lopez
ABC, 7NEWS

DENVER -- State lawmakers took a chunk out of the growing e-commerce pie by passing House Bill 1193 Wednesday, adding a 2.9% sales tax to Internet purchases made by Coloradans.

"This is a big deal. It really is. And it’s the broader question of whether or not it’s appropriate to tax Internet sales. And I got to tell you, the people of Colorado are going to be really mad when they find out the Department of Revenue is sending them a bill for things that they’ve purchased online," said Sen. Greg Brophy, R-Wray.

Online retailers would be required to notify a Colorado shopper -- before they buy -- how much they owe in state sales and use taxes on the item they’re shopping for.

"Those online stores aren’t sucking up any state services, are they?," said Brophy. "They’re not. So it’s probably not appropriate to even think about taxing things like that. What we really need to be doing is talking about reforming government and reforming our tax system."

The Colorado Department of Revenue would receive an annual report from each online retailer -- or “e-tailer” -- for the total amount of purchases made by each Colorado customer.

If the tax is not paid up front, state employees would then go about notifying those affected and collecting the taxes.

One bill sponsor told 7NEWS the idea is to allow smaller, brick-and-mortar shopkeepers to compete with larger, virtual marketplaces such as Amazon.com

"If this continues, we’re going to have virtually no small merchants on main streets in this state. And that’s not the right way to do it. If they can’t compete that’s one thing but then to make them compete unfairly is another," said Sen. Rollie Heath, D-Boulder. "These local merchants are paying for our schools. They’re paying for our roads. And if you can save a lot of money on the Internet, that’s fine. Then you certainly can afford the 2.9% that you’re saving."

At the Sportsfan on Federal Boulevard in Denver, the news of a possible Internet sales tax was met with some optimism.

"Virtually all of my ordering is done through the Internet," said John Brennan, store manager. "As a traditional brick-and-mortar store it should help us. My gut feeling says it will help us."

House Bill 1193 now goes back to the House for a final vote.

A call to a spokesman for Gov. Bill Ritter about support or opposition for the bill was not returned.

Virginia lawmakers are considering a similar measure while some have advocated a national Internet sales tax as well.

http://standeyo.com/NEWS/10_Economy/100212.CO.internet.tax.coming.htmlhttp://www.thedenverchannel.com/news/22527850/detail.html