ACMA members should be aware that just prior to its new “tattletale” law’s July 1st effective date, the Colorado Department of Revenue adopted, on an emergency basis, an amendment to its regulation. The change sets forth the requirements under its notice/reporting law for those companies that are not registered to collect and remit the Colorado sales and use tax.
While the ACMA does not fully grasp the Centennial state’s reasoning, here’s a synopsis of the changes to the transactional notice as summarized by our legal counsel Martin Eisenstein of Brann & Isaacson:
Placement Requirements Changed
Although the regulation does not make changes to the content of the required transactional notice (members – please see prior Legal Corner columns that discuss the content of the transaction notice), it does significantly alter the required placement of the notice. The new rule provides different requirements depending on the type of order.
For Internet orders, the notice must be provided on the checkout page, sufficiently close to the total price for the ordered products. If providing the transaction notice on the checkout page is “impractical” (more on that later), then the regulation requires a linking notice on the checkout page to another web page with the full statement of the transactional notice.
For telephone and mail orders, the notice is to be on the order form. Again, if individual companies deem this “impractical,” the notice should then be included on an attachment to an invoice or confirmatory communication, with a statement on the invoice or confirmatory communication near the price or tax section as follows: “See attachment for information on the tax you may owe.”
Legal Terms Need Clarification
The Colorado Department of Revenue refers to “impractical” and “confirmatory communication,” but doesn’t define either in the regulation. We urge members to confer with legal counsel for an appropriate interpretation of this regulation.
In a subsequent Legal Corner column Brann & Isaacson will soon distribute to ACMA members only, Brann & Isaacson will report on the amended regulation’s requirements for the annual statement to customers and annual “tattletale” report to the Department of Revenue.
Hamilton’s Take
As for ACMA’s perspective, I want to share with you how personally disappointed I am with this entire series of events, one that Colorado made even worse at the 11th hour. This demonstrates a complete lack of respect for both Colorado citizens, who must bear a gross violation of their personal privacy, as well as companies across the country, which should not be regulated in such a heavy-handed way.
Provided the catalog and online retail markets continue to provide us with resources, we are committed to fighting these ill-advised — and what we have now shown in court to be illegal — actions on the part of states while we continue to seek a reasonable federal solution to this issue that does not unduly harm our industry.
Until such time, I urge you to continue to push back, resist voluntary offers for you to comply with these new creative state nexus regulations (we can see how that works out) and continue to bankroll our ongoing fight in the state courts.
For more on this lunacy, click here for a recent op-ed I wrote. I am happy to discuss this with any remote marketer. Together we can stop the insanity.
Sincerely,
Hamilton Davison
President & Executive Director
American Catalog Mailers Association
hdavison@catalogmailers.org
