Amazon Endorses Application of the Sales Tax to Online Commerce

Saturday, November 12, 2011 at 12:33 AM by

11-11-11 – No, that isn’t a new alternative to Herman Cain’s tax plan (at least not that I know of); it’s merely today’s date. But in addition to being Veterans Day, today seems to be a good time to note that the tide continues to be turning slowly in favor of applying sales taxes directly to online sales. The latest evidence of that tidal shift came Wednesday, when Amazon announced its support for a new bill that would allow states to require online and catalog retailers to collect sales taxes from their customers.

Until recently, Amazon vigorously fought efforts to tax online sales. Its position began to soften a bit after a heated battle with California over a law there that endeavors to force online sales tax collection. In early August, Amazon came out in favor of a bill introduced in Congress by Democrats authorizing states to collect taxes on online sales. And on Wednesday it endorsed similar legislation, called the Marketplace Fairness Act, which has bipartisan support.  That bill was introduced this week by Senators Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.) and Mike Enzi (R-Wyo.).

The National Conference of State Legislatures, which supports the legislation, says the tax loophole for out-of-state sales in general is costing states $23.3 billion this year. A University of Tennessee study estimated state and local governments miss out on $11.3 billion in tax revenue from internet commerce alone. That would be very welcome relief for states struggling with severe budget challenges.

Read more in a Nov. 10 article by Governing.com.

Jon Peacock

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