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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: Still Not Fair
By lightfoot on 12/2/2011 7:06:43 PM , Rating: 2
A redesign DOES NOT make sense.
States should have NO power to regulate or tax business that operate OUTSIDE of their borders.

The correct course of action is to ENFORCE the existing USE taxes on the state's OWN citizens.

If the state tax is unenforcable, it should NEVER have been passed in the first place. Changing FEDERAL LAW regarding INTERSTATE COMMERCE is NOT THE CORRECT SOLUTION to a STATE TAX ISSUE.

And again - the B&M retailers are the ones pushing VERY hard for a change in the law specifically because of the fairness issue. States are on board only because it they are starved for revenue. If the economy was booming, the states would not be pushing for this change.

RE: Still Not Fair
By Reclaimer77 on 12/2/2011 7:38:28 PM , Rating: 2
States should have NO power to regulate or tax business that operate OUTSIDE of their borders.

They don't. It's Unconstitutional for them to collect sales tax on purchases outside state lines. So they concocted something called a "use tax", where they tax you for "using" something you bought online in the state. Which is just a sales tax in another form. It's as transparent as it is dishonest legalese mumbojumbo.

RE: Still Not Fair
By bah12 on 12/5/2011 9:23:16 AM , Rating: 2
They don't. It's Unconstitutional for them to collect sales tax on purchases outside state lines.
Last I checked only the the Supreme Court can rule something Unconstitutional, so your opinion of right or wrong doesn't really matter now does it? The argument really isn't about if you agree with the law, and just because you don't doesn't make it any less valid. Fact is these laws have been in place for quite some time, and have NOT been ruled invalid by courts. Thus they are valid, sorry that's the way our system works.

RE: Still Not Fair
By bah12 on 12/5/2011 9:27:54 AM , Rating: 2
Despite all your CAPS LOOK AT ME I'M RIGHT!!! You are in fact wrong. The federal government CAN create a tax, and use that tax revenue to fund the states, which is what a redesign would mean. It would be a new federal tax collected at the federal level and funded back to the states.

This is all perfectly legit in our current system. I do tend to agree that the states should solve this themselves though. If they don't have the sales tax revenue, raise property/income tax. Pretty simple fix.

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