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Amazon endorses online sales tax simplification bill

updated 04:40 pm EST, Thu February 14, 2013

Represents an evolving position on sales tax collection

The biggest retailer on the Internet, Amazon, is throwing some of its weight behind a new Senate bill that would allow states to collect sales tax for online sales -- provided they simplify tax laws regarding variations in rates and collection methods. While not explicitly saying it endorses the bill in its current form, the Kindle maker thanked the authors of the bill for bringing the issue forward -- another sign that Amazon's formerly hard-line stance against online sales tax is softening.

The bill, known as the Marketplace Fairness Act, would make it easier for states to start taxing online purchases from out-of-state sellers in the same way that they do with brick-and-mortar retailers. Additionally, the bill would require states to simplify sales tax variations in counties, cities, and states, as well as eliminate differences in whether something is taxed when purchases are made using other mediums (for example, ordering something over the phone will likely be taxed, while buying something online likely won't be taxed, depending on the state one lives in).

Amazon has spent nearly two decades fighting the entire notion of collecting sales tax for online purchases, originally arguing that the Internet was an emerging business environment that needed the special protection in order to foster adoption and growth. Almost 20 years later, that argument no longer holds water, especially with tax-starved states. The company has since argued that sales tax collection across various boundaries and regulations becomes an excessive burden by way of enforcement costs, paperwork and liability.

Amazon's Vice President for Global Public Policy, Paul Misener, thanked Senators Richard Durbin (D-Illinois), Mike Enzi (R-Wyoming) and Lamar Alexander (R-Tennessee) for their work on the bill, saying that Amazon "has long supported a simplified nationwide approach that is even-handedly applied and applicable to all but the smallest-volume sellers." Despite having previously been against any form of online sales tax in part due to the onerousness of compliance with so many jurisdictions, Amazon now collects sales tax for purchases in at least eight states.

The bill offers two options for tax simplification, but only affects retailers who make more than $500,000 in sales from out-of-state customers, AllThingsD reports. The proposal is supported by many brick-and-mortar retailers, though most have significant online presences as well. Ebay, whose business model is highly dependent on small-volume sellers, is known to be opposed to the bill in its current form. Traditional retailers have long complained of unfair competition by way of online stores' ability to avoid charging sales tax.




By Electronista Staff
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