Source: Retail Systems Research.

The gig is up, according to an interesting, albeit non-scientific 2009 poll by industry watchers Retail Systems Research.

Given the condition of the U.S. and states’ economies and the loss of tax revenues during this recession, the momentum is building across the country to address this issue. Whether the U.S. Congress will deal with it is an entirely different matter. As long ago as 2001 (when internet sales only represented about 1.5% of total retail sales), 40 State Governors sent a letter to Congress asking that a 1998 moratorium on internet sales tax be lifted. But in October 2007, the House of Representatives voted 405-2 to pass the Internet Tax Freedom Act Amendments Act, extending the moratorium on internet access taxes and other taxes unique to the internet until November 2011.

As promised, RSR ran a “quick take” poll to see what our readers think about the prospect of an Internet Sales Tax (the results are in the chart below). Safe to say, colonial Boston’s Rev. Jonathan Mayhew’s 1750 call for “no taxation without representation” still rings in many Americans’ ears! The most interesting data point from this survey is that not one of the 54 people who answered the question had “no opinion.” Twice as many respondents were adamantly opposed to the new tax as those who were in favor of it. If our readers are any indication, this issue is bound to polarize the voting public.

But what does this really mean for the bottom line of cash-strapped states?

By 2012, a staggering $12.65 billion in local and state tax revenues from uncollected e-commerce sales could be left on the table, according to a 2009 study by University of Tennessee researchers.

That could fill an awful lot of pot holes — or in Colorado, blow up a lot of boulders from a rockslide that punched holes in I-70 near Glenwood Springs cutting off the state’s main east-west thoroughfare.

The pushing match between Amazon.com, its Colorado marketing affiliates and the state already has caused some bruises, and now grassroots groups are shoving back.

Amazon fired its marketing affiliates in Colorado earlier this week in what’s being called retaliation for a new e-commerce law signed by Governor Ritter, which seeks to require Amazon and other online retailers to notify customers that they owe state sales tax on their purchases. Now, the drama is heating up with grassroots groups calling for a boycott of the online retailer.

Alec Harris, an analyst with the Colorado Fiscal Policy Institute, supports the online tax law and the boycott, saying Amazon’s claim the new requirements are “unduly burdensome” is an overstatement.

“This bill is just asking Amazon to inform their consumers — it strikes me that that’s sort of on par with, and maybe even a little bit below, what a lot of the retailers are already doing.”

Other retailers, such as Best Buy and Target, operate both online and retail stores in Colorado and collect sales tax from both types of transactions, Harris points out. Republican lawmakers in Denver have called for a repeal of the law, but supporters say that would amount to appeasing a bully. Harris hopes the boycott will send a simple message to Amazon.

“This is the law; this is what a good majority of retailers already do; we think it’s only fair for Colorado businesses that you do the same.”

An Amazon spokesperson would not comment on the reason for cutting ties with Colorado affiliates, but said they see the new law as a way to pressure online retailers into eventually collecting sales tax voluntarily.

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