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Will Amazon Get a Visit From the Tax Man?
theodp writes to tell us that according to the Wall Street Journal, Amazon.com has raised a few eyebrows with their strategy to avoid paying sales tax in eight states where they have warehouses or distribution centers. "As an online retailer, Amazon can avoid collecting sales tax in states where it has no presence, at least until Congress changes the law. But in states where a company has actual facilities, such as warehouses, states tax officials can require the company to collect sales tax. Despite operating hundreds of thousands of square feet of distribution facilities in the eight states, Amazon says it doesn't have any presence in them. The company argues that it doesn't operate the plants, its wholly owned subsidiaries do."
Typically, if you're a customer, you have to pay sales tax to the seller if they have a "business presence" in your state. Business presence, of course, is quite ambiguous. Several online retailers have simply rolled over instead of fighting against this (Crucial.com comes to mind; they charge sales tax even if they don't have a presence in the state, and remit the tax to the taxing body in your state). Amazon on the other hand doesn't have the luxury of rolling over. Part of their competitive edge is not having a sales tax, and frankly, they shouldn't have to pay one as someone else mentioned, as the services their distribution centers use should be covered by their property taxes.