Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Amazon Pushing National Sales-Tax Bill

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Looks like's (Nasdaq: AMZN  ) pugnacious bet on national sales tax reform is paying off.

The Seattle company says it is strongly supporting a proposed national law that would force online retailers to collect local taxes on more of their sales, ending a longtime loophole originally meant to help catalog businesses. The National Retail Federation, which has battled with Amazon on the sales tax issue, also is on board with the bipartisan Senate proposal announced today (the federation represents lots of brick-and-mortar retailers).

So how's that a win? Amazon has gone to some pretty extreme lengths to avoid being deputized as a tax collector for state and local governments, insisting that its shipping centers are different companies and even shutting down entire networks of third-party sellers when state lawmakers pass "Amazon tax" bills.

That behavior has caused a lot of turmoil for the ecosystem of smaller businesses that rely on Amazon. One example is the story of Shopobot, a comparison-shopping start-up that relocated from the San Francisco Bay Area to Seattle earlier this year specifically because Amazon axed its affiliate program in California.

But Amazon has said for a long time that it favors a national solution, rather than a hodgepodge of different state rules. Specifically, the company has supported something called the Streamlined Sales Tax project, in which states agree to a common set of sales tax definition and practices.

The common standards are important because each state taxes things differently -- sometimes wildly so.

Cue up today's bipartisan Senate bill, which uses the Streamlined Sales Tax program as a centerpiece of any national tax system for online sales.

So, while any retailer would certainly enjoy the fact that it didn't have to act as a big tax collector, and could price its products a little better to boot, Amazon clearly knew the days of tax-free Internet sales weren't going to last forever. It placed its bet on a national system, and made some pretty belligerent moves to reinforce that preference.

And it looks like that strategy is paying off.

There's no guarantee that this bill will actually become law, of course -- the federal lawmaking process is both arcane and volatile, and any tax vote will be a tough one in this economic climate. But it's got a lot of the hallmarks of something that could pass.

An interesting side note: Shoppers in Washington state already pay sales taxes on Amazon purchases, because the company's headquarters are here. But the state also says it's only collecting taxes on about half of the online and mail-order purchases by people living here, and that adds up to some big numbers.

If the new Senate proposal becomes law, Washington officials estimate that state and local government treasuries could raise about $242 million annually. That comes at a time when the state has been cutting billions from spending on education, health care, and other expensive government programs.


More from

Curt Woodward is senior editor at Xconomy Seattle. Reach me at Get story feeds and more on Twitter @curtwoodward and Facebook

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1587200, ~/Articles/ArticleHandler.aspx, 10/22/2016 11:34:38 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes