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Amazon Tax Advantage At Risk

Currently, Amazon doesn't require consumers in many states to pay sales tax. If cash-starved state and federal lawmakers have their way, however, Amazon could soon lose that key advantage over its brick-and-mortar rivals. Later this month, Senate Majority Whip Dick Durbin (D-Ill.) plans to introduce a bill, dubbed the Main Street Fairness Act, which would require all businesses to collect sales tax in the state where the consumer resides, Bloomberg Businessweek reports.

Originally meant to support and nurture a fledgling online industry, there's a growing sense among state and federal lawmakers that the online sales-tax reprieve constitutes an advantage that Amazon, with a reported 90 million customers and $34 billion in annual sales, no longer needs. "This idea is overdue," Durbin tells Bloomberg Businessweek. "Online retail sales are now very fulsome and are growing at the expense of local units of government."

1 comment about "Amazon Tax Advantage At Risk ".
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  1. Rick Alber from Target Spot Network, June 3, 2011 at 1:29 p.m.

    The online sales-tax reprieve has never had anything to do with nurturing a fledgling online industry and everything to do with decades-old legal doctrine. Something about a state not having the right to force a company located in another state to collect taxes on its behalf. Mail order catalog companies have enjoyed this sales tax "reprieve" since the 1800's and probably explains why the Sears catalog was such a roaring success long ago. When legislators go on and on about unfairness to brick and mortar concerns they rarely mention what's good for consumers nor do they address the high cost of shipping that brick and mortar businesses avoid. Just saying...

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Gavin O'Malley edits MediaPost's Mobile Marketing Daily and MoBlog column. Follow him: @mp_gavin. You can reach Gavin at gavin@mediapost.com.