No, Colorado cannot unilaterally impose tax obligations on out-of-state businesses, U.S. District Judge Robert Blackburn ruled recently. Blackburn threw out Colorado’s 2010 “Amazon Tax” that sought to force out-of-state sellers to assist the state in collecting sales taxes from residents. The judge ruled that the controls “impose an undue burden on interstate commerce.”
The decision is welcome news, especially for Colorado residents who were cut off from the Amazon Associates advertising program due to the law.
The bad news, as David Harsanyi points out, is that various groups and politicians continue to push the “Amazon Tax” at the federal level. Among other injustices involved in such a tax, writes Harsanyi, “Though larger corporations like Amazon or eBay can probably swallow the cost of these regulations, for smaller companies it could easily become prohibitive.” The fundamental problem, however, is that a federal “Amazon Tax” would enable states to confiscate even more wealth from residents of those states.
A common argument for enabling states to collect sales taxes from out-of-state sellers is that without this ability sales taxes unfairly harm local sellers. But the fact that state governments force local businesses to collect sales taxes is not a reason to enable state governments to assault out-of-state businesses in the same manner. Rather, it is a reason to demand that state governments repeal laws requiring local businesses to collect sales taxes.
Government has no moral right, and thus properly no legal right, to seize money from consumers, whether directly or via proxy, for the mere act of purchasing goods and services from willing sellers in the marketplace.
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Image: Repeal the Amazon Tax