The Colorado legislature and Governor Bill Ritter (D) recently passed a bill which Amazon.com felt would be too costly to come into compliance with, and pulled out of all relationships with Colorado-based advertisers. As of March 8, 2010 Amazon sent a letter to its associates in Colorado explaining the closing of their accounts. The text of that letter can be found at the bottom of this post.

The decision to do this was probably a difficult one for Amazon, and will no doubt lead to some loss of sales for them, but it’s understandable that they felt the need to take this step. The Ritter administration and the Democrat-controlled Colorado legislature grows increasingly hostile towards business, even in this harsh economy. As businesses flee Colorado, they take their jobs and tax revenue with them. Governor Ritter has shown time and time again to be committed to political ideology rather than the people of Colorado, and he has the enthusiastic backing of a willing majority in our state legislature. Colorado’s fall to one-party-rule has been devastating to the state’s oil and gas industry, and as they scramble to plug the resulting hole in the state’s budget we see new taxes in ill-conceived bills like this one.

The Colorado legislature and the Ritter administration should be ashamed of their overall attitude towards the businesses that provide employment for the people of our great state, and ultimately pay the state’s bills.

Dear Colorado-based Amazon Associate:

We are writing from the Amazon Associates Program to inform you that the Colorado government recently enacted a law to impose sales tax regulations on online retailers. The regulations are burdensome and no other state has similar rules. The new regulations do not require online retailers to collect sales tax. Instead, they are clearly intended to increase the compliance burden to a point where online retailers will be induced to “voluntarily” collect Colorado sales tax — a course we won’t take.

We and many others strongly opposed this legislation, known as HB 10-1193, but it was enacted anyway. Regrettably, as a result of the new law, we have decided to stop advertising through Associates based in Colorado. We plan to continue to sell to Colorado residents, however, and will advertise through other channels, including through Associates based in other states.

There is a right way for Colorado to pursue its revenue goals, but this new law is a wrong way. As we repeatedly communicated to Colorado legislators, including those who sponsored and supported the new law, we are not opposed to collecting sales tax within a constitutionally-permissible system applied even-handedly. The US Supreme Court has defined what would be constitutional, and if Colorado would repeal the current law or follow the constitutional approach to collection, we would welcome the opportunity to reinstate Colorado-based Associates.

You may express your views of Colorado’s new law to members of the General Assembly and to Governor Ritter, who signed the bill.

Your Associates account has been closed as of March 8, 2010, and we will no longer pay advertising fees for customers you refer to Amazon.com after that date. Please be assured that all qualifying advertising fees earned prior to March 8, 2010, will be processed and paid in accordance with our regular payment schedule. Based on your account closure date of March 8, any final payments will be paid by May 31, 2010.

We have enjoyed working with you and other Colorado-based participants in the Amazon Associates Program, and wish you all the best in your future.