Today Colorado House representatives will vote on a bill that will determine the future of potentially hundreds of small businesses in the state. HB 10-1193, also known to some as the "Advertising Tax" directly affects the livelihoods of work-at-home parents throughout Colorado.
They're trying to help us, but instead it could hurt us.
The goal of the bill is to collect sales tax from out-of-state retailers which in turn would help fund much needed Colorado programs and services. These out-of-state retailers work directly with affiliates in Colorado who advertise the retailer products and services. Entire businesses are built on this model, earning an income based on the advertising revenue.
If HB1193 passes, the retailers will terminate relationships with their advertising affiliates putting Coloradoans out of business. Rather than gaining much needed revenue for the state, this bill will create more unemployment, financially devastating hundreds of Colorado families.
Arguments for this bill have been posed that HB 10-1193 helps to defend and protect "the little guy"... our local brick and mortar businesses that can't compete with the big "behemoth" online retailers. It's also been stated that while the decisions are difficult, there are no easy answers and without this bill, more cuts will have to be made.
What about our other little guy businesses? Moms work in all kinds of businesses throughout this great state. Are brick and mortar businesses the only ones worth protecting?
According to many opposed to this bill, the local businesses, working parents throughout the state, advertising for these large internet retailers will lose their affiliation with these companies, putting them out of business... more Colorado families will be struggling to make ends meet. Coloradoans will continue to make purchases through these retailer websites so the "little guys" will not have won a thing. There will be no tax revenues earned and more cuts will still have to be made. No one will win, but many will lose.
How will our government prevent making cuts when the expected revenue doesn't materialize?
Let's hope the House realizes the truth behind this bill before they make the mistake of passing HB 10-1193.
More info about this bill, A pdf file from the state website: http://bit.ly/CObill
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Comments
We just shot down a similar bill here in New Mexico, and rightfully so - bills like this do not level any kind of playing field and only hurt small businesses that have been founded on the affiliate marketing model. It's really very simple - online merchants, rather than collect sales tax, will simply terminate their relationships with these local small businesses and affiliates. The affiliates suffer, the online merchants do business as usual, and the state of Colorado will not only *not* see additional tax revenue from the online merchants, they will *lose* tax revenue from those affiliates who no longer have an income to pay income tax on.
It's bad legislation whichever way you look at it. There are zero upsides for anyone.
Hey Jenn,
Outstanding article! A very well articulated example of why politicians, regardless whether State or Federal, are out of touch with those they are supposed to represent!
How many members of the Colorado State Houses own their own small business? Their wives or husbands? Do ANY of them actually use the Net on a regular basis to see what kind of real world impact the legislation will have on local, in home, businesses?
This bill, like the new Obama 3.83 TRILLION dollar budget, has no connection to reality in an efficacious manner: both will cripple businesses and individuals.
We who live in the real world, the non-politically correct and concrete world of real consequences from decisions understand what will happen if either the State Bill passes or the Federal Budget passes: the debilitation of family finances and an ever endangered future for families.
Cheers from Wyoming
What a shame that Colorado legislators are willing to burden so many small home office businesses and risk the livelihoods of their owners. It's sad that a successful alternative to traditional employment, that provides many parents the ability to balance work and home, is being jeopardized. Why? There is plenty of proof that the revenue being promised fails to materialize. The advertisers that hire the small businesses just sever their relationships and CO is left with higher unemployment!
There we go.. I was just asking Brad.. where is some information on this that I can send people to.. Good Job Jen! I'll rt and fb this for ya.
Thank you all for your support! The bill did indeed pass the House today so now we need to fight it in the Senate. If you are involved in this industry and have a message to share, please do so! We need to help protect the rest of the little guys in Colorado from losing their entire businesses...
As we move forward, this misconception continues to "brand" the Democrats who believe the Ad Tax bill will do good for merchants. As your astute article points out, it is a lose/lose/lose deal for all parties. Rhode Island and North Carolina have earned no revenue after passing similar bills. Our States are destroying perhaps the most healthy category of business in favor of brick and mortars who really need to join the revolution online and compete in the global and national marketplace. It is the old fighting the new. Amazing to see, terrifying to live through. Thanks for your article!
Good news, during the 2nd reading Monday night, the Senate passed a revised version of HB 1193. The new bill, no longer includes affiliates as a facet of the out-of-state retailer tax battle. Yay!
Just got my letter from Amazon terminating my affiliate account. I read that the bill was "rewritten" and this termination would not happen after all - but here it is. :(
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