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Paul Misener, Amazon's vice president of global policy   (Source:
Smaller online retailers believe Amazon is using sales tax standards to crush smaller competitors

Amazon asked Congress to set federal standards for states' online sales tax collection in a House Judiciary Committee hearing earlier this week.

Amazon spent a lot of time battling the collection of online sales taxes over the past couple of years. If forced to collect sales tax in a particular state, Amazon would simply pack its bags and move on to another state. This happened in states such as IllinoisCalifornia and Texas.

Amazon got away with avoiding sales tax collection because of a 1992 Supreme Court ruling that excuses Amazon and other remote sellers from having to collect taxes in states that do not have the company's employees or warehouses operating within their borders. However, Amazon said it would comply with sales tax collection of online goods if there was federal regulation instead of different states with different rules.

Now, Amazon is pushing Congress to set standards more than ever. Paul Misener, Amazon's vice president for global public policy, attended a House Judiciary Committee hearing on Wednesday to address the issue of federal standards for collecting state sales taxes online.

Some lawmakers are onboard with Amazon's request, such as Representative John Conyers (D-MI), who sides with brick-and-mortar retailers regarding online retailers' "unfair advantage."

John Otto, an accountant and state representative from Texas, is also onboard with the idea and addressed the concerns of Republican panel members regarding whether the sales tax collection would be viewed as a tax increase.

"This is not a new tax we're collecting," said Otto. "It's a tax we've been unable to collect."

Not everyone is cheering for Amazon's position on taxes, though. Smaller online retailers like believe Amazon is jumping onboard the tax wagon now because it's a chance to hurt smaller competitors. Amazon is so huge now that it can handle being taxed while smaller e-tailers like Overstock could largely be affected by such taxes.

But Misener doesn't see it that way. He said the sales tax collection wouldn’t be as burdensome as the smaller e-tailer's think.

"With today's computing and communications technology, widespread collection no longer would be an unconstitutional burden on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect," said Misener.

Sources: The Consumerist, BusinessWeek

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RE: Agree with the taxing or not...
By bah12 on 12/2/2011 12:45:44 PM , Rating: 2
The biggest issue is dealing with all of the municipalities on the back end.
Exactly calculating and collecting it is no big deal, but how do you pay the rural ND county tax office (or worse the city office)?

What they need is and IFTA type federal regulation. A central authority that the merchants submit funds to, then it distributes it to the members. Problem is even IFTA only goes to the state level. Sales tax can be split up all the way to the township (ie X% to State, Y% to county, Z% to city). So it is much more complex to get everyone paid correctly.

RE: Agree with the taxing or not...
By Cypherdude1 on 12/2/2011 3:28:01 PM , Rating: 3
And now that a hugh amount of sales is online, there should be a uniform way of paying these state sales taxes.
It was reported that Cyber Monday sales were up 22% from last year. That's a huge increase. In comparison, retail sales were up 7% , good but not incredible. I can't really blame online buyers. Most people, including myself, don't want to wait in line, tussle with all the other shoppers, etc...

Anyway, my question is, how does this affect people who live in states where Amazon does NOT have a physical presence? Does this mean those people still do NOT have to pay taxes or is everyone now going to have to pay state sales taxes? One of the main reasons why shoppers can go online and get great deals is because they only have to pay shipping. If shoppers have to pay shipping plus taxes, it's not going to be such a good deal anymore.

RE: Agree with the taxing or not...
By bah12 on 12/2/2011 4:47:32 PM , Rating: 3
Physical presence does NOT determine if you owe sales tax. Most physical presence ONLY determines if the merchant is required to collect and pay that tax on your behalf. Most states are quite clear that anything you've purchased where the seller did not collect the sales tax, you have to fill out a a form and send in payment.

Simply put the BUYER is always responsible for the tax.

By tastyratz on 12/5/2011 11:59:54 AM , Rating: 2
Right on the money
and good luck getting ANYONE to fill out a form for collecting taxes on their online purchases. States know this and is why we have all the bustle.

"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

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