Amazon joins Walmart in push for online sales tax (opens in new tab)

The crux of the article is this:

Amazon joins Walmart in push for online sales tax not out of some newfound concern for "marketplace fairness," but because Amazon's business model is changing in such a way that now Amazon stands to benefit from this tax.

In order to provide faster shipping, Amazon is building warehouses throughout the country. These warehouses constitute a "physical presence," which requires them to collect sales taxes, in any event. So, if Amazon is going to have to collect sales taxes under the existing "physical presence" doctrine, it may as well try to expand online sales taxes to whack its smaller competitors who don't have a 50-state network of giant warehouses.

Sigh!

Takeaway: you will already be paying sales tax on your Amazon purchases in the future, and Amazon want to force other retailers to do the same in order to keep the playing field level.

So much for Amazon's risible old saw that "sales taxes vary so much among jurisdictions that calculating taxes would be an onerous burden for us". There is some business size at which that is true, but Amazon has never been that small. Lots of folks use Vertex: http://www.vertexinc.com/solutions/indirect/sales-tax.asp

Since Amazon has been growing its SaaS business for some time now one had to expect they were eventually going to want to make operating shopping cart checkout by yourself as tricky as possible. They might start lobbying municipalities to pile on the complications now that they're on the "right" side of this dispute.

I'm surprised this article made no mention of the affiliate nexus laws that have been passed over the past few years. The law was first passed in New York requiring Amazon to collect sales tax from NY customers. NY claimed Amazon's NY "associates", affiliates earning commissions for sending customers to Amazon, represented a physical nexus. Amazon agreed to collect the tax in this case, but it opted not to collect tax in other states who enacted a similar law. Instead Amazon effectively "fired" all of the affiliates living in those states. In one case Fat Wallet, a major player in the online affiliate industry, moved their company out of Illinois because they lost many of their affiliate partners. Illinois didn't gain anything and lost a source of income tax. This has been a major issue in the affiliate industry as it cuts off huge sources of revenue for affected affiliates. Amazon is pushing for the federal government to step in partly because they don't want to lose their online marketers. Secondly, they don't want to maintain a database of tens of thousands of tax jurisdictions across the country.

The lobbyists are going to be the death of the United States.

I can't blame Amazon though, just looking out for themselves which is the same as the rest of us do.

Having just filed my taxes, and gone through the "so how much tax free stuff did you buy online?" rigmarole this would actually make my life easier. The article calls all but eBay and Overstock.com "Mom and Pop" shops. A real local store that happens to sell stuff online will actually benefit from this law. States will benefit, since this law will actually level things. The only places that will suffer are Amazon's smaller competitors, which otherwise would just turn around and try to crush the local brick and mortar small shops.

Just noting that this article is from last August.

Yay for using government to blast competition to little bits!

Bad from an environmental perspective: Mail delivery uses a fraction of the carbon of driving to the store.