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Court strikes down Colorado’s ‘Amazon tax’

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DENVER — A federal court has struck down Colorado’s so-called “Amazon tax”, which Democrats pushed through the legislature in 2010 to apply state taxes to online retailers selling products from out-of-state companies.

The tax was part of a package of budget-balancing measures pushed by Democrats — and dubbed “The Dirty Dozen” by Republicans — that also included doing away with tax exemptions for candy, soda and agricultural products.

Supporters said the law closed an unnecessary tax loophole that was giving online retailers a competitive advantage over companies that are physically located in Colorado, which are forced to collect state taxes on all purchases.

Republicans argued the law was a burden, as did Amazon, which dropped an estimated 4,200 affiliates in Colorado rather than comply with the law and figure out what consumers owed after tacking on the additional 2.9 percent sales tax.

U.S. Judge Robert E. Blackburn ruled Tuesday that that indeed put “unique burdens” on out-of-state retailers.