Should Amazon Be Required to Collect Sales Tax? Voters May Soon Have a Say

Amazon is the most prominent online retailer. When it was founded, internet commerce was in its infancy.

In a bid to encourage the nascent industry, Amazon was not required to collect sales taxes. The thought was that ecommerce was good for the nation and the world, would create lots of value and new jobs and everyone would live happily ever after.

Yup. Sure. Well here we are a bunch of years later. The economy is in the tank. Jobs are disappearing faster than beers at happy hour, malls are closing, bricks-and-mortar retailers are fighting for their very existence - and suddenly Amazon's advantages arent looking quite so beatific.

California, among the most desperate American states due to self-imposed fiscal shackles, has passed legislation requiring Amazon to start collecting taxes. Amazon has dodged it so far through some legal sleight of hand but is now gearing up for a full-fledged political campaign. Opponents and proponents are both claiming life, liberty and the fate of our fair Republic rest on the outcome. The reality is that Amazon can afford to collect the taxes and will probably not notice much diference. However, there is a principle at stake (or several dozen of them, depending where you are)and net neutrality is one them, so this is going to be messy. The guess is here is that if Amazon goes ahead with the referendum they are proposing, they will lose. And then life will go on. JL

Jennifer van Grove reports in Mashable:

Should Amazon be required to collect sales tax on online purchases? The behemoth online retailer remains at odds with California legislators over that very issue. In June, state tax legislation was signed into effect requiring the site to collect a 7.25% base sales tax on online purchases made by consumers in California. Amazon has thus far avoided its obligation, opting instead to circumvent the law by severing ties with its affiliates in California.

Now, the Internet ecommerce giant is collecting signatures in an effort to take the issue to state voters next June. “Once it submits the signatures for the referendum and they are verified, the law will be suspended until the vote.”
State lawmakers, meanwhile, are working to pass urgent legislation to thwart Amazon’s attempts. Amazon, says the Times, has drafted a counterproposal that offers to build two warehouses and hire 7,000 workers in the state if the sales tax matter is suspended for a few years.

The battle has become a hot button issue in California — a state in dire need of revenues from sales tax — and beyond.

“Amazon fears that a defeat in California will sway legislators across the country, and that it will lose a critical pricing advantage. It is fighting a similar measure in New York in the courts,” the Times writes.

“Like so many others, I love the convenience of shopping at Amazon, the unparalleled selection, the great customer service, the ease of checkout, the low prices. I don’t need the added incentive of no sales tax to make me shop there,” O’Reilly Media founder and Silicon Valley thought-leader Tim O’Reilly opined on Google+ Monday morning. “Yes, it would be a minor inconvenience for Amazon to collect sales tax for every county in the nation … But at this point, the added advantage we’re giving to them and other online retailers is completely unnecessary, except to gild their bottom line.”

Where do you stand on the issue? Should Amazon be treated as any other brick-and-mortar store and thus be required to collect sales tax from its customers? Vote in the pole below and share your thoughts in the comments.