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  (Source: Stuart Isett/The New York Times )
Amazon says these sales taxes are "unconstitutional and counterproductive"

Amazon has fully committed itself to its effort against the collection of sales taxes, and it continues to prove this dedication over and over as it cuts ties with state after state.

After cutting ties with states like Texas, where Texas State Comptroller Susan Combs charged Amazon $269 million in unpaid sales taxes, and Illinois, where Sen. Dick Durbin (D-Ill.) plans to introduce a bill that would force Amazon to collect sales tax called the Main Street Fairness Act, Amazon is now looking to turn its back on California as well after Governor Jerry Brown signed a bill that would enforce the collection of online sales tax. 

"We oppose this bill because it is unconstitutional and counterproductive," said Amazon in an e-mail to Californian affiliates. "It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. As a result, we will terminate contracts with all California residents that are participants in the Amazon Associates Program as of the date (if any) that the California law becomes effective."

Amazon also noted that these sales taxes "spur job and income losses." But Amazon has to do what it feels it should do, and with this bill in place, Amazon won't think twice about cutting ties with its 10,000 California-based sales affiliates.

Amazon is the largest online retailer with more than 90 million registered buyers and $34 billion in annual sales. In recent times, it has encountered increased pressure from certain U.S. states to collect online sales taxes since the retailer's affiliates operate within those states. In addition, some U.S. states see an online sales tax on Amazon purchases as a way of digging themselves out of large state budget deficits. 

But Amazon refuses to back down. Last month, Amazon CEO Jeff Bezos said the U.S. states' demands were unconstitutional, citing a 1992 Supreme Court decision that 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. 

As of right now, Amazon collects taxes in Kansas, Kentucky, New York, North Dakota and Washington. In other U.S. states where Amazon does not collect sales taxes, customers are to document and pay tax on out-of-state untaxed sales, but rarely do because they either don't know about this or just don't care.

Brick-and-mortar stores like Best Buy and Wal-Mart retaliated saying that Amazon has an unfair advantage due to its lack of sales tax collection in other states.



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RE: High and Mighty Wal-Mart
By Solandri on 7/1/2011 7:33:32 AM , Rating: 2
I'll say again: Amazon does not have an unfair advantage.

- When Amazon sells things to customers in states where they have a physical presence, they collect sales tax.
- When mom and pop store sells things to customers in states where they have a physical presence, they collect sales tax.

- When Amazon sells to customers in other states, they don't collect sales tax.
- When mom and pop store sells to customers in other states, they don't collect sales tax.

It's the same for both, ergo it's fair. The cause of the disparity is not Amazon having an unfair advantage. It's the mom and pop store being put at a disadvantage by the state they're in deciding to charge enough tax to change buyer behavior. If the states really hate how local businesses are being hurt by Amazon, they have a perfectly legal remedy available to them - lower or eliminate their sales tax.

Don't get me wrong. If the Federal government decided to step up and fix the issue through some sort of national sales tax, I would be fine with it (I might not like it, but if that's what the majority decides, that's what we do). But claiming Amazon has an unfair advantage here is like complaining that Susie has lots of cookies while you have none, omitting the fact that you ate all yours already.


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