Calling B.S. On Amazon's Taxation Arguments

theodp writes "Over at the Center on Budget and Policy Priorities, Michael Mazerov carefully picks apart Amazon's arguments against collecting sales taxes, arguing that they simply do not withstand scrutiny. While Amazon officials say collecting sales tax in every state would be excessively burdensome, Mazerov notes the e-tailer already collects sales tax in virtually every state for numerous other companies that sell on its website. Mazerov also finds it disingenuous for Amazon to argue that it should not have to help support public services in states in which it has no physical presence when the company fails to support public services in most of the states in which it does have a physical presence. Finally, Mazerov isn't buying Amazon's argument that its opposition to collecting sales tax is not driven by a desire to gain a price advantage over competitors, which he finds at odds with the company's own actions and SEC filings. By claiming sales-tax immunity, says Mazerov, Amazon has enjoyed an unfair 5%-10% price advantage over local retailers, while also depriving states and localities of hundreds of millions of dollars of legally due revenue each year."

Comments

Use Tax

[FredFredrickson]

It's already the law in some states to report purchases that you have not paid sales tax on, called a Use Tax. If you purchase something and Amazon does not collect sales tax, you are supposed to report this directly and pay it directly to the government.

I think the real problem is that since nobody does this, they expect Amazon to do the legwork.

Realistically, it is a businesses' job to collect tax for the state it currently resides in. It would be an undue burden for just about any business to get the workings of every other state's tax just to do business, say, like a phone order!

Sure, amazon is big enough, but that still crushes the little guys with a hefty start-up capital requirement, and a full time tax guy to figure this out.

What they need is a disclaimer telling customers that they may need to report the use-tax, and give a hyperlink to more info on that.

Re:Use Tax

[clarkkent09]

Why should a private company be forced to act as an unpaid tax collecting agent of the government? It is the IRS's job to collect taxes, not Amazon's. What people like you obviously don't realize is that most of the bureaucratic, safety related, tax related etc etc requirements that the government imposes on businesses actually benefit large corporations, who sometimes actively lobby for them, because they provide a barrier to entry for the small competitors. You put a finger on it exactly. It's no big deal at all for Amazon to meet these requirements. It IS a big deal for a small company trying to compete with Amazon, and your argument that "if you don't like it don't start a business at all" is music to the ears of large corporations. Some people don't in fact start a business due to already excessive red tape required and we are all worse off for it

Legally due

[j00r0m4nc3r]

If it was legally due then states would sue and win. It's not legally due. Yet.

alternative

[kimvette]

I'd like to propose an alternate solution

I know, most politicians won't go with it, but here it is: How about cutting spending, not only making the additional revenue unnecessary, but enabling the cutting or even elimination of many taxes and "user fees?"

Government on the attack

[MSTCrow5429]

By claiming sales-tax immunity, says Mazerov, Amazon has enjoyed an unfair 5%-10% price advantage over local retailers.

Then stop attacking the local retailers with taxes.