Amazon strongly supports online sales tax, but with provisions

By on November 30, 2011, 5:30 PM

Amazon has fought hard to dodge sales tax bullets fired by several states, including California, New York and Connecticut. The debate has been over whether or not such requirements jibe with existing federal and state commerce laws and in a couple of cases, even why Amazon should be singled out over other online retailers. Amazon's bullet-time may be running out though as Congress considers a bill poised to enable states to collect sales tax from out of state businesses.

On Wednesday, officials held a House Judiciary Committee meeting to discuss sales tax, the Internet and the "Streamlined Sales and Use Tax Agreement", a bill put together by 10 senators. Amazon's vice president for global public policy, Paul Misener, took part in the meeting. Other company and organization leaders were there too, including eBay and the National Retail Federation. 

Despite Amazon's adamant, past opposition to collecting sales tax from its out-of-state customers, Misener claimed to strongly support new federal legislation as it may provide an "even-handed federal framework" for states to collect their share. Misener continued, "Amazon strongly supports enactment of a federal bill with appropriate provisions".

Recent estimates by the National Governors Association peg potential sales tax revenue at about $22 billion. Currently, this is money that states are unable to collect as they cannot compel businesses outside of their borders to collect taxes on sales.

Misener noted that, "Widespread collection no longer would be an unconstitutional burden [because of current technology] on interstate commerce, and Congress feasibly can authorize the states to require all but the very smallest volume sellers to collect," but he cautioned that the exemption threshold, "must be kept very low to attain the objectives of protecting states' rights, addressing the states' needs, and creating fairness among sellers".

Included in the bill is a clause that exempts online retailers who generate under $500,000 in gross revenue. eBay's vice president, Tod Cohen, said the company supports the exemptions for small business retailers. However, Misener pointed out that less than 1% of online retailers actually do more than $150,000 worth of sales per year.

User Comments: 6

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Johnny Utah said:

Terrific, so the state gets a hold of another 22 billion that they can mishandle and waste at our expense.

Guest said:

Assuming Sales tax is a viable way for the government to get money and realizing that online sales are overtaking local sales, it seems we need a new system. They could tax all cross state border sales at a set rate of say 5% and then distribute that back to the states based on percentage of sales. In other words, Amazon collects $1000 in cross border taxes and NY state purchased 25% of sales from Amazon so they would get $250 in revenue. This would make it easy for States and vendors to understand without a lot of other regulation.

Tomorrow_Rains said:

oh cool, so since amazon is in california, i will be paying shipping fee's based on two state taxes my state, and california?

Guest said:

Boooooo.... Hopefully will be other sites who pick up the slack and still don't charge sales tax. I Hate sales tax..I pay freaking taxes on my income and crap I buy locally...Can't get a break from the man anywhere it seems!!!! Hey how about instead of going after consumers go after the companies using offshore loopholes to pay no taxes and shipping all our jobs overseas! Freaking goverment is a joke.

MilwaukeeMike said:

Johnny Utah said:

Terrific, so the state gets a hold of another 22 billion that they can mishandle and waste at our expense.

Exactly. Well.... they do have this new healthcare thing to pay for...

Know what I think is funny? There's another story on this website about an app that tracks your browsing history etc and there are 30 people who respond with their opinion about overbearing govt and CIA consperacies etc (it wasn't even a govt app)... Now here's a story about the govt, for real, sticking their hand in your pocket and hardly anyone is angry.

They must be the same people who protest the bad economy by blocking streets so people can't get to work.

Guest said:

We have been conditioned (brainwashed) for decades to accept buying by mail order/internet is an almost shady transaction and should be taxed.More dollars spent by the elites for their benefit alone.

Or, that the Politicos are royalty and the president is king--or that an extravagant defense budget is necessary to our survival--or that our government actually produces something other than misery- or that corporations are our benefactors, ad infinitum ad nauseum.

Don't like it? Write protest letters to Washingtons elite parasites, vote the bums out of office and try to get back our government by and for the people.

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