Amazon has fought a never-ending battle on a state-by-state basis over varying sales tax concerns. The online retailer has been following a 1992 US Supreme Court decision concerning the collection of sales tax from customers if the retailer has a physical presence in that state, but in light of the firestorm of opportunity that swept the country when different states saw a veritable cash cow from the nation’s largest online retailer, Amazon has had to get creative with different states.
The latest deal involves Texas, the now-future-home of a large distribution center and the promise of over 2,000 new jobs. In order to avoid paying back sales taxes along the lines of $269 million, Amazon agreed to build the new facility and therefore (in accordance with the ruling) begin collecting sales tax from Texas customers. This deal is set to go into effect July 1st and follows closely on an agreement with Nevada recently.
All along, Amazon has maintained that it would cooperate with, and even support, a national sales tax ruling for online retailers. However, it was the forced adaptation to fifty different states’ laws that the retailer took issue with. As of yet, a national sales tax law has not come up for a vote in Congress.
While some states simply saw the so-called “Amazon Tax” as a way to bring much needed revenue to their states in a bad economy, there has been loud support from organizations that support brick-and-mortar bookstores, as well as some major chain book retailers who compete with Amazon for consumers’ dollars. While some would agree that it does seem vindictive for the competition to be such staunch supporters of new tax laws meant to include online retailers, others could easily argue that it is simply leveling the playing field in some small way.
Mercy Pilkington is a Senior Editor for Good e-Reader. She is also the CEO and founder of a hybrid publishing and consulting company.
