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Sen. Dick Durbin (D-Ill.)  (Source:
Senator Dick Durbin (D-Ill.) plans to introduce a bill called the Main Street Fairness Act

Amazon's war on taxes is becoming a tale as old as time. A U.S. state pushes the online retailer to collect taxes, and Amazon simply packs its bags and leaves for the next state that will leave it alone. But this time, that may not be the case.

Amazon is the largest online retailer with over 90 million registered buyers and $34 billion in annual sales. It launched in 1995, and sells everything from food, furniture and apparel to computers, electronics and toys. 

Recently, U.S. states have started pressuring Amazon to collect sales taxes on its items due to the retailer's affiliates operating within those states, and because of large state budget deficits. For example, Texas State Comptroller Susan Combs gave Amazon a $269 million bill in unpaid sales taxes, which led to Amazon's decision to close a local distribution center and cancel all plans to expand in the state of Texas. 

In another instance, Amazon won an exemption on a new sales tax law in South Carolina after saying it would pull a distribution center from the state if forced to collect. Amazon has also cancelled tens of thousands of affiliate accounts in Illinois and Colorado due to tax problems, and has brick-and-mortar chains like Best Buy and Wal-Mart breathing down its neck because of Amazon's "unfair advantage."

The unfair advantage refers to the online sales tax reprieve that was put in place awhile ago to support the then-upcoming industry of online shopping. But now that Amazon is large and in-charge, states and brick-and-mortar retail chains believe this reprieve is no longer necessary.

Now, Amazon may be in an inescapable position as Senator Dick Durbin (D-Ill.) plans to introduce a bill that will require all businesses to collect sales tax "in the state where the consumer resides." The bill is called the Main Street Fairness Act.

"This idea is overdue," said Durbin. "Online retail sales are now very fulsome and are growing at the expense of local units of government." 

Amazon argues that a Supreme Court ruling from 1992 excuses Amazon and other remote sellers from having to collect taxes in U.S. states that do not have the company's employees or warehouses operating within its borders. In addition, Amazon notes that it currently collects taxes in Kansas, Kentucky, New York, North Dakota and Washington, and that buyers in other states where taxes are not collected are to report it themselves, though they rarely do. 

According to a University of Tennessee study, U.S. states will collectively lose $10.1 billion in uncollected sales tax revenue this year. Next year, that number is expected to jump to $11.3 billion. With many state budgets in the red, the collection of online sales tax looks to be a quick fix that they all will continuously push for.

Jeff Bezos, Amazon CEO, has said that he would prefer that the tax situation be "fixed properly" through federal legislation, and this month, he may get his wish. Durbin is gathering support from former mayors and governors who are now in Washington "weighing the budget problems back home," and the issue will go to Capitol Hill by the end of the month.

"Doing it state by state gives the Internet companies an opportunity to go shopping, to find the state that is going to treat them the best," said Durbin. "It certainly argues for a federal approach."

Jason Brewer, vice president for communications and advocacy for the Retail Industry Leaders Association, is unsurprisingly for Durbin's new bill, saying that it's only a matter of time before Amazon will be forced to collect taxes

"Ultimately, this is a battle they are going to lose, and this is about how long they can push off that day of reckoning," said Brewer. "They always claimed to support a federal solution, but they've never lifted a finger to get there."

Even if Amazon loses this battle, it really wouldn't be that bad for the online retail giant. According to analysts at Wells Fargo Securities, Amazon's products would still be cheaper than Wal-Mart or Target even if it had to collect sales tax. In fact, if Amazon had to collect sales tax, it would be 5 to 6 percent cheaper than Wal-Mart and 12 to 13 percent cheaper than Target. In addition, with a sales tax policy in place, Amazon could add new shipping centers anywhere they pleased, and could accelerate shipping time.

With prices remaining lower than brick-and-mortar retailers and items being delivered quicker than ever with cheaper shipping prices, how could Amazon lose?

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RE: B&M Changes?
By Reclaimer77 on 6/3/2011 2:47:28 PM , Rating: 5
Taxes should be fair

Taxes, by their very nature, are unfair. Are you an educated individual at all? You'll find no such use of the word "fair" in U.S tax law, I assure you.

If States cared about "fairness", they would remove sales taxes altogether. This isn't about being fair, it's about getting as much money as they can instead of cutting budgets.

RE: B&M Changes?
By robert5c on 6/3/2011 5:13:11 PM , Rating: 3
hear hear!

coming from a state (Oregon) that doesn't charge sales tax (so really any of this wont help my B&M stores), i never understood sales tax. You already pay taxes on your income, at the federal if not also the state level, your then supposed to get taxed again when you spend that money?

this really only hurts the young and poor that can't save and spend every dime...they get taxed a second time on ~100% of their income

RE: B&M Changes?
By Reclaimer77 on 6/3/2011 5:32:57 PM , Rating: 3
You already pay taxes on your income, at the federal if not also the state level, your then supposed to get taxed again when you spend that money?

Yes and then when you die you pay "Estate Tax". They are triple dipping!

RE: B&M Changes?
By MadMan007 on 6/4/11, Rating: -1
RE: B&M Changes?
By TheDoc9 on 6/6/2011 12:06:39 PM , Rating: 1
It's even worse than that, because as that money is passed through the family it's continually taxed through sales/investment or further estate tax.

For some reason the poor lazy people with a victim mentality who want to steal from the evil rich don't see how fucked up that is.

RE: B&M Changes?
By callmeroy on 6/6/2011 2:16:31 PM , Rating: 2
yep! The Estate /Death Tax I have always thought as having no excuse but pure unbridled greed on the government level. Granted I'm no financial advisor so maybe there is a very rare case where an Estate tax does make sense from the simple view of what it is...its just pure greed to me.

I believe if you gift a certain amount to someone that is taxed as well....I forget the term for that tax, but I mean its just so ridiculous ...taxes taxes taxes....

RE: B&M Changes?
By cerx on 6/6/2011 5:04:27 PM , Rating: 2
The purpose of the "death" tax is to prevent the situation we left in England and Europe where families who "have" now will "have" forever. It's an attempt to level the playing field.

RE: B&M Changes?
By Reclaimer77 on 6/6/2011 8:23:17 PM , Rating: 2
If you think the Forefathers set out to make sure that people who "had" didn't "have forever", you're a sad individual.

Taxes were never meant to target unpopular people or business or to "level" anything. We've lost our way.

RE: B&M Changes?
By semiconshawn on 6/4/2011 1:00:36 PM , Rating: 2
Ahh Oregon. I used to love to drive down from Washington to shop. No state income tax Wash. no sales tax Ore. Pre Amazon tax free bliss.

RE: B&M Changes?
By foolsgambit11 on 6/4/2011 7:48:26 PM , Rating: 2
Sales taxes make sense because they can be targeted. Income taxes can also do that, but it is only half of the story. The government needs both tools to optimize economic growth. The government also needs to use the tools sensibly, lest they become implements of destruction. But just because they can be used wrong isn't a sufficient argument for their abolition. Neither is your (or my) personal belief that the money raised is being incorrectly used. These are collective decisions, made by our duly elected representatives, and changeable by our representatives (or by us in a referendum/proposition/initiative), if we as a whole truly think the change must be made.

Additionally, the poor don't get taxed on 100% of their income on the way out - they get taxed on substantially less than the rich, because essentials like food staples are not taxed at purchase (and are in fact generally subsidized at production to make them cheaper to buy). Since food makes up a larger percentage of their spending, they are taxed less than the rich - an example of sales tax being used in a targeted manner.

RE: B&M Changes?
By HrilL on 6/6/2011 11:50:39 AM , Rating: 2
How about get just get rid of non necessary spending? How about we have smaller government that stays out of our business and doesn't feel the need to protect people from their own retardedness? What ever happened to personal responsibility and taking care of ones self? Why should the middle class support people that don't want to work and just suck the government tit? If Oregon can get by without sales tax and lower income taxes then I'm sure every other state can as well.

If we really want the economy to turn around quickly we need to cut taxes. Cut spending and make government much much smaller. And cut out useless regulations. We also should make it so environmental groups can't file lawsuits without just cause because they're slowing or halting American innovation. We should also eliminate copyright and patents as these create artificial monopolies that also hinder innovation and create a tax on innovation. Capitalism is about competing in the market and government granted monopolies shouldn't be allowed to hinder true competition.

"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings

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