Because of a 1992 Supreme Court ruling, Amazon and other online retailers that don’t have a physical presence in a state don’t have to pay state taxes. Good news for them, and the consumers who avoid those taxes, but legislators are still pushing for those taxes to be collected. And now Amazon is onboard, which irks some smaller online retailers.
Yesterday, Amazon.com’s vice president for global public policy, Paul Misener, went before a House Judiciary Committee hearing to weigh in on the tax bills, reports BusinessWeek. Amazon is now working with the government to set federal standards for states collecting taxes from online purchase, but Misener urged that any exceptions to the tax should be kept “very low.”
Legislators argue that online sellers like Amazon have an edge over physical retail stores, as consumers want to avoid paying taxes wherever they can. Of course, all responsible consumers are supposed to still pay those taxes come April 15. Ahem.
“Online retailers have, let’s face it, an unfair advantage,” said Representative John Conyers of Michigan (D), a co-sponsor of one of three pending bills that would give states the ability to collect taxes on sales by out-of-state vendors.
Some online retailers say the taxes could harm smaller business who sell a majority of their merchandise via the Internet, whereas larger companies like Amazon and eBay most likely wouldn’t be hurt as much by the collection of those taxes. Those small online retailers think Amazon’s cooperation with the legislation is a bid to hurt their rivals.
While you should be keeping your receipts and paying taxes where they’re due, many consumers maybe aren’t doing that. Once the ease of buying online comes with a tax, some might choose to return to the brick-and-mortar stores, a scary idea for Internet retailers.
Amazon Executive Asks Congress to Address Online Taxes [BusinessWeek]