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Amazon forges ahead on sales tax

May 2, 2012 at 3:52 PM   |   Comments

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WASHINGTON, May 2 (UPI) -- Internet retail giant Amazon's tax deals struck with Texas and Nevada have changed the debate on a federal tax for Internet sales, a Washington lobbyist said.

"Whether you need to change the (federal) law begins to look like one segment of the retail business putting burdens on another segment," a lobbyist for an Internet company was quoted by Politico as saying Wednesday.

It may be hard enough to pass a sales tax bill in an election year, but Amazon has struck deals with seven states, including two announced last week.

That seemingly takes the wind out of a federal tax bill's sails.

"I think they are being strategic," said Betsy Laird, a lobbyist with the International Council of Shopping Centers.

"They have to make accommodations if they are going to be good corporate citizens in those states," she said.

Amazon's deal in Texas includes bringing their bill with the state up to date, creating new jobs and initiating sales tax collections for purchases made by residents of Texas as of July 1.

Amazon has also come out in support of a federal bill that would create an all-encompassing tax system for all e-commerce in all states.

"The debate has progressed, and it has matured, as has the legislation," said Scott Stanzel, a spokesman for Amazon, which is based in Seattle.

Amazon has in the past sided with a 1992 Supreme Court decision that held that companies owed states sales tax only if they had a physical presence in that state.

With that in mind, California changed the rules by declaring that any Internet firm in California that provided links for consumers to eventually make a purchase at Amazon was, in effect, an extension of Amazon, which met the definition of Amazon having a physical presence in the state.

On the federal level, however, a number of bills seeking to put closure on the issue have stalled, even though some of them have bipartisan support.

The bills have stalled, but brick and mortar stores have not stopped complaining that Internet companies are allowed to give their customers a discount by avoiding a tax they have to pay.

"Amazon may be the big fish, but it's still a big pond," said Jason Brewer, a spokesman with the Retail Industry Leaders Association.

"There are thousands and thousands of online retailers that are not collecting today. The simplicity that will come with a federal bill would benefit everyone," he said.

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