Last week, the U.S. Supreme Court declined to hear a challenge from Internet retailer Amazon.com over its being forced by a state to collect sales tax, even though it didn’t have a physical presence in that state.
It’s a hot-button topic, particularly here in Amazon’s home state.
It’s a sticky situation that is sure to have repercussions on both large and small retailers, online and traditional.
Who should decide whether an online retailer must collect sales tax? Should it be regulated by the federal government?
Or should it be handled more locally, at either a state or municipal level? Should shoppers pay the sales tax for where they live or where the company is located?
Then there’s the question of fairness. Why should a retailer with a physical location collect sales tax when an online store doesn’t have to?
The list of questions goes on and on. And the issue seems more confusing than it needs to be.
Boiling it down to simpler terms:
Nearly all government agencies say they are starving for money. But is another tax really the answer?
Most consumers — and affected retailers themselves — adamantly say “no.” And we believe government, at all levels, needs to take a more fiscally conservative approach to revenues and expenses before levying more taxes.
But without taxing online sales, would we be giving shoppers another incentive to avoid the brick and mortar stores that support our hometowns?
Traditional retailers say the tax-free factor gives Internet businesses an unfair advantage. With online shopping expanding rapidly with no end in sight, they may be right.
There’s no doubt that the question of how to handle taxes for Internet retailers is one that must be addressed. A short-sighted approach to a long-term problem could muddy the issue even further.
We don’t have the answer.
But we recognize this could be a cornerstone issue for years to come. And the outcome will likely affect us all.