Amazon might support an Internet sales tax

After being sheltered for so many years, the online retailer ironically may be backing a change for buyers.

By Benzinga Mar 25, 2013 12:53PM
By Tim Parker

The largely ceremonial budget passed by the U.S. Senate on Saturday included an amendment giving states more authority to collect sales taxes on Internet purchases.


The sales tax amendment, according to Hispanic Business, was really designed to test support for the "Marketplace Fairness Act," a bipartisan measure that has come to be known as the “Amazon tax.” The budget amendment passed by a vote of 75-24, signaling possible strong support should the act come up for a vote as a stand-alone law.


The Senate budget – including the sales tax amendment - has virtually no chance of adoption, thanks to the continuing showdown between the Democratic majority in the Senate and the Republican-controlled House. Nonetheless, many experts and analysts, including Forbes’ Robert Wood, believe we are moving closer to a day when sales tax will be collected on all online purchases – not just those in states where the seller has a physical presence.


One of the more curious developments in this ongoing debate is that Amazon (AMZN), the world’s largest online retailer, supports the notion that Internet sellers should be required to collect sales taxes – even in states where they don’t have a physical presence.


Curious, that is, until one digs a little deeper. As Bloomberg notes, Amazon is expanding its physical presence into more states and would be required to collect taxes in those jurisdictions anyway. This gives the company plenty of incentive to lobby for a law that would force competitors with smaller geographic footprints to play by the same rules.


All this leaves a dizzying “odd couple” juxtaposition of proponents and opponents of the law. Supporters include bricks-and-mortar retailers like Wal-Mart (WMT), Best Buy (BBY), Target (TGT) and Dollar General (DG), along with online retailer, Amazon.


Opponents include eBay (EBAY), Facebook (FB), Oracle (ORCL) and anti-tax groups including Americans for Tax Reform and Campaign for Liberty.


Organizations like Americans for Tax Reform and Campaign for Liberty maintain passage of such legislation would constitute a new type of taxation -- allowing states to reach across their borders and force retailers to comply with complicated and expensive tax laws.


Not surprisingly, proponents of the “Marketplace Fairness Act” believe the measure levels the playing field, forcing all retailers to play by the same rules. The act, as currently written, includes an exception for smaller online companies with gross annual sales of less than $1 million.


The National Retail Federation, another supporter of the law, estimates state and local governments lose as much as $24 billion a year in taxes from non-taxed Internet purchases.


More from Benzinga
51Comments
Mar 25, 2013 1:18PM
avatar
Sure Amazon's #1 on the internet and favors a tax that thy just pass along to consumers.  Consumers don't favor another damn tax on what they're doing for free.  Just like cable and satellite TV that replace free TV. As humanity progresses faster and faster we pay more for speed but get less content.
Mar 25, 2013 3:52PM
avatar
I do not Favor any more Taxes'  Enough where will it stop. 
Mar 25, 2013 3:10PM
avatar
I already pay $49.99/month for the privilege of buying something on line!  It's not like I'm saving any money by going online to make a small purchase.   Add some tax!  Make it more expensive and make me less likely to buy!  Long live internet commerce!
Mar 25, 2013 3:06PM
avatar
Well let amazon go with the tax. They will suffer and allow Walmart to shut their asses down like all other competitors. Amazon you are only hurting yourself, let your investors and boards know you will be dropped like Netflix and their debacle.
Mar 25, 2013 3:10PM
avatar

If they do this then they will lose costumers. I will shop some where else if they do decide to make us pay taxes on their site.

Mar 25, 2013 3:47PM
avatar
That is all our government can think of, raise more taxes!   What's new with the liberal thinking!  Tax. tax tax. until there is no more money to tax!  Let socialism reign!
Mar 25, 2013 4:19PM
avatar
Most people do not understand that Amazon works with over 40k marketplace merchants that sell their products on the Amazon platform. Those merchants are required to pay tax in the states where they have a physical presence. The best solution would be to have a federal tax law passes where everyone would pay the same tax no matter what state you live in. For now if you want to avoid paying tax make sure you know who you are buying your products from and where they are shipping from. Support the small businesses and stop supporting Amazon who is basically the Walmart of e-commerce.
Mar 25, 2013 5:26PM
avatar

Thats why I quit buying from Amazon, I don't pay tax,there are plenty websites

wher you don't have to pay tax!

Mar 25, 2013 5:15PM
avatar

Some of you posters live in the land of make believe....   It was just a matter of time before they changed the law to require everyone to pay taxes.   Even with taxes most items on Amazon are still cheaper then box stores like Best Buy where you have to pay taxes...

 

Don't get me wrong, I get tired of being taxed on everything also but I knew it was just a matter of time before our politicians went after the online market place.  So this is no surprise to me...

 

Mar 25, 2013 4:40PM
avatar

Big business will do anything to screw a small company. Biggest problem for nickel dime merchants is record keeping for all little little $ 2 to $ 10 dollars sales. Sometime you need 10000 sales to make 30000 total sale.. That among generally add about 3000-6000 dollar income for the labor of packing and shipping. If record keeping has to be done for this and comply with all the regulations that will follow will end their businesses.

 

That will be gain for Amazon. Bezzo is not stupid. He beieves anything for a buck.

 

Good way will be exempting business with less than 100,000 sale. I believe all businesses with less than 100,000 dollar sales should be exempt for most of record keeping. Their indirect contribution to economy and their marginal improvement of income and quality of life are worth the value it create for the country.

Mar 25, 2013 5:24PM
avatar

 

quote: "The National Retail Federation, another supporter of the law, estimates state and local governments lose as much as $24 billion a year in taxes from non-taxed Internet purchases."

 

Understand thats 24 b comes out of your pocket, you pay this tax, it comes outa your pocket, nuf said?

Mar 28, 2013 5:25PM
avatar
I really don't see the problem. This was a loophole that was bound to be closed someday. I live in WA and we have always had Amazon sales tax, and it still is a way better deal most of the time to buy through them.
Mar 25, 2013 4:04PM
avatar
It wouldn't be a "new" tax. It would just be sales tax. Amazon wouldn't be "passing" it on to the consumer. If your state charges sales tax then you would pay. If it doesn't then you wouldn't. Not a hard concept to grasp.
Mar 25, 2013 6:37PM
avatar
Amazon shouldn't be supporting something that puts less money in the pockets of their customers.  While it's true that many of their customers will end up having to pay sales tax anyway, if one of their customers does shop else where, what if it's the stuff they buy from Amazon that gets cut from the budget in order to pay for this new tax?  The bottom line is that the less money in people's pockets is less money going into companies pockets (like Amazon). 

Yes, it will force Amazon's competitors to charge sales tax, but it will ultimately hurt everyone, including Amazon since the consumers will be the ones who will forced to buy less.  This is, of course, considering that most consumers won't spend more than what they make (which we should encourage people staying debt free).

In my opinion, this will hurt B&M stores the most since the stuff from Amazon and other retailers is probably not going to get cut from budgets.  It'll be coffee runs, McDonald's, cable bills, and the like that consumers will cut out of their budget, all of which are local.

Mar 25, 2013 6:15PM
avatar
There's always a way around sales tax.  You need a friend in Oregon, a no tax state, have the goods sent there and forwarded to you.  Always figure a way around taxes, it can be done.
Mar 25, 2013 6:14PM
avatar
This is why I don't buy on Amazon anymore....Greedy bastards along with the Government....Besides their shipping cost as much as the product..As far as I am concern they can charge all you morons 100 % tax
Mar 25, 2013 4:06PM
avatar
I live in AZ and Amazon is taxing all purchases here.
Apr 25, 2013 5:00PM
avatar

This is just collecting a tax that most folks are now evading.  I'd rather the Fed's collected it and turn the dough over to the states with likely prosecution for goods sold to people who claim but do not actually live in states with no sales tax...NH, DE, etc.  Perhaps if states collected the money they are losing to Internet sales, they could lower their rates by a point or two.

Mar 26, 2013 12:54PM
avatar
By the time you pay the tax and shipping, you are saving nothing. Unless of course you spend more money to buy more junk you don't need to get free shipping. Still paying more.
Mar 26, 2013 5:07AM
avatar
If they add tax I will not use them anymore because I won't be saving money while waiting for my product that I can just go out and buy and take home the same day
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT TECHBIZ

Start investing in technology companies with help from financial writers and experts who know the industry best. Learn what to look for in a technology company to make the right investment decisions.

RECENT POSTS

Facebook will tell you when friends are nearby

With its 'Nearby Friends' feature, the social media giant enters an already crowded and somewhat contentious space occupied by the likes of Foursquare and Tinder.

VIDEO ON MSN MONEY

RECENT QUOTES

WATCHLIST

Symbol
Last
Change
Shares
Quotes delayed at least 15 min

MSN MONEY'S