Earlier today Paul Misener, the Amazon VP for public policy, testified in front of Congress. He wasn’t there to make an offer for Amazon to buy North Dakota (they need the warehouse space); that’s tomorrow. No, Paul was there to speak in favor of passing new laws to close the current loopholes in existing sales tax laws.
Most states require residents to pay a sales tax on all their purchases, but they also require a retailer to collect it. This has led to a rather tricky situation when the retailer is located in another state and thus has no obligation to collect the tax.
Several states have passed laws to force the issue, and most of these laws require collecting sales tax if a retailer has affiliates in a state. Amazon and other web retailers have fought back by cutting ties with partners in those states so they wouldn’t be required to collect the sales tax. This debate has been going on for a couple years now and as a result we now have Congress looking to pass laws to settle the issue.
Amazon is in favor of Congress passing laws which decide once and for all who has to collect taxes and how much. “Mr. Chairman, Congress should authorize the states to require collection, with the great objects of protecting states’ rights, addressing the states’ needs, and leveling the playing field for all sellers. … Fairness among sellers should be created and maintained. Sellers should compete on a level playing field. Congress should not exempt too many sellers from collection, for these sellers will obtain a lasting un-level playing field versus Main Street and other retailers. Congress should rectify the current imbalance and avoid a future imbalance.”