Industry Eye: Legal Matters - Colorado Invades Consumer Privacy to Collect Sales Taxes

The Colorado General Assembly is taking an alternate path to obtain sales tax revenues on purchases by Colorado residents from out-of-state retailers.
The new legislation, effective March 1, requires notices be sent to Colorado consumers in connection with every purchase they make on which sales tax isn't collected. Consumers must pay the sales tax directly to the state's Department of Revenue (CDR), and retailers are obligated to report Colorado consumers' total annual purchases to the CDR. A proposed regulation would also require merchants to turn over shipping addresses to the CDR. The mandatory disclosure of confidential consumer information to state tax officials has raised serious objections from both consumers and direct marketers.