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Senator Dick Durbin (D-Ill.)  (Source:
The new bill would apply to online retailers like Amazon, and Amazon has agreed to cooperate

Amazon has been battling state after state in an effort to avoid sales tax collection, but a recent bill by Senator Dick Durbin (D-Ill.) is changing Amazon's mind as the federal action gains increased support. 

Amazon, the largest online retailer with over 90 million registered buyers, has been pressured to collect sales taxes by U.S. states in the recent past due to large state budget deficits, and brick-and-mortar stores complaining about unfair competition. According to University of Tennessee studies, states are expected to lose $10 billion in uncollected online sales taxes this year, and another $11.4 billion next year. With states already dealing with weak economies, this additional loss in taxes hurts, and the potential gain could lift them out of the red. 

The online retail market was worth $165 billion last year, and some U.S. states did all they could to get a piece of that. For instance, Texas State Comptroller Susan Combs charged Amazon $269 million in unpaid sales taxes, and California state Governor Jerry Brown recently signed a bill to enforce online sales tax. Both instances caused Amazon to cut ties with in-state affiliates and split, noting that a 1992 Supreme Court ruling excuses the online retailer from collecting taxes in states that do not have company employees or warehouses operating within its borders. 

Amazon has said that it would change its tune if the problem was "fixed properly" with federal legislation. Durbin answered this call a couple of months ago when he introduced the Main Street Fairness Act, which requires all businesses (online and brick-and-mortar alike) to collect sale tax "in the state where the consumer resides." His aim is to give states the authority to require retailers to collect sales taxes already owed, and will not impose new taxes.

The bill is now gaining momentum as it attracts more supporters. Last Friday, the National Governors Association and the National Retail Federation gave the bill their support.

As promised, Amazon has cooperated with the new measure. All the company has asked for is a "national framework" for remote sales taxes, and Paul Misener, Amazon's vice president for global public policy, has written a letter to Durbin pledging to cooperate. 

Analysts at William Blair & Co. have said that Amazon's prices are an average of 11 percent below store prices of half of over 2,000 items for sale at 24 retailers. If Amazon were to begin collecting sales taxes, this 11 percent would drop to the single-digits.

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RE: Amazon's position is reasonable
By bah12 on 8/1/2011 9:54:53 AM , Rating: 2
Although you've done a good job at making your first point "appear" to be insurmountable, the fact is almost ALL states have different payroll taxes, and different filing methods for them. Yet every multi-state employer has been able to handle them for years.

The last thing we need is another federal law overriding what is clearly a State's right to set. It may cause a headache at first, but either deal with that headache or don't do business there.

IMO what really needs to happen is the State's going after individuals that are evading the use tax in their state. Am I am innocent? Of course not, but I'm fully aware that my state requires I pay the tax if it is not collected for me by the retailer.

If anything I would like to see the federal government involved in streamlining a reporting mechanism that the online retailer has to file yearly. Say a Name, Address, dollar amount (nothing about what was purchased). They can provide that to the State and the purchaser. If the State does not seeing any taxes being paid where owed, then the State can go after the true culprit here.

I know in this day of entitlement, this is probably an unpopular thought. However, if you are not paying use tax on online purchase, AND your state requires you to do so. You are evading taxes, plain and simple.

RE: Amazon's position is reasonable
By bah12 on 8/1/2011 9:59:11 AM , Rating: 2
And to all those that will surely chime in and say a use tax is unconstitutional. That may well be, but until held up as such by the Supreme Court, it is in fact legal. You may disagree with it, but that is the way our system works. As of today they are legal, until our courts say otherwise.

Now if you want to NOT pay them, then pay an attorney to fight your case. Good for you, and I hope you win.

By knutjb on 8/1/2011 12:19:43 PM , Rating: 2
Your right, until tested a Federal sales tax would be treated as legal until shot down by the courts. The same is in work for Obamacare.

The point this chain is missing isn't really Amazon but Progressives trying to force things to be "fair" which it can never be. They have been trying to add taxes to fund their politics. I lived in Europe and that is what they have taxes, oops "revenues," on everything most buried in the price tag and not seen at the register, i.e. the UK's VAT the tax doesn't show on the receipt.

Online has the advantage in price, B&M has the product in-store. How badly do you need it? Besides didn't Walmart do more damage than online?

I think Amazon is trying to walk a fine line to not anger the politicians and end up on the front page like Wall Street. The real villains are in DC.

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