If the customer lives outside Colorado, Theilen said, he doesn't try to track the sales tax. The process is cumbersome and even uses a state Web site to do the calculations, said Thielen, whose business is based in Broomfield. Colorado does not have something set up, in any way, shape or form that major Web sites can use. Sales tax collection over the Internet is spotty at best, nonexistent at worst. And what to do about it is a hot political topic.
Municipalities are concerned about the loss of money.
The Colorado Municipal League estimated the average city gets nearly two-thirds of its revenue from sales tax. Others, among them Gov. Bill Owens, argue that any kind of taxation would stifle free enterprise and the booming growth of e-commerce. However, sales taxes and use taxes are nothing new. Several states already are applying those taxes to the Internet, he said. Electronic merchants would have to deal with more than 30,000 taxing jurisdictions in the United States, each with its own rules, regulations and percentages, he said.