“Even if the law is a zero-sum proposition, many lawmakers feel there’s an important principle at stake — a level playing field for business. Brick-and-mortar stores located in Colorado are required to collect sales tax. An exception for out-of-state online retailers gives them a competitive advantage. Their customers get a “discount” because a series of U.S. Supreme Court decisons have found that states can’t compel online retailers to collect sales tax. The court considered that with so many states and localities applying different tax rates to different tax bases, forcing retailers to figure out the appropriate tax to collect on sales in each jurisdiction would impose an unacceptable administrative burden on sellers.
This results in what the Institute on Taxation and Economic policy calls a “messy patchwork” of sales tax collection practices.”