Tax Wars: Online v. Brick-and-Mortar Retailers

July 18, 2011 -

A war is brewing in California (and beyond) between traditional retail and online retailers on sales tax. For years politicians said they would not tax the internet, but a recent change in laws has made it so that Amazon.com has to collect sales tax from any affiliate doing business in the state. While traditional brick-and-mortar retailers applauded this change (they see it as leveling an uneven playing field) online retailers are, to turn a phrase, pissed off. Among other efforts, Amazon.com is seeking to rally anti-tax Americans by proposing a voter referendum in California to overturn the new state law.

Retailers, using the power of lobbyists in D.C. are on the other side of the issue and include such heavyweights as Wal-Mart, Sears and national organizations such as the National Retail Federation. Because of their lobbying efforts and deep local, state, and federal connections with politicians, they have the support of states, which sees taxing online sales as a new ways to gain much-needed revenues.

"Congress has to take action," Neal Osten of the National Conference of State Legislatures, tells Politico. "..this is $23 billion that the federal government can give to the states."

Meanwhile, Sen. Dick Durbin (D-Ill.) is expected to introduce a bipartisan bill in the next few months called the "Mainstreet Fairness Act," that would allow states to require online retailers to collect sales tax if states agree to standardize those taxes.

Politico claims that Durbin has held off on introducing the bill because he wants to line up support for it. But Durbin will probably find himself caught in the crossfire of lobbying efforts from both sides of the issue.

Online resellers such as eBay and the Electronic Retailing Association are stepping up efforts by hiring lobbyists firm Mehlman Vogel Castagnetti, led by Bruce Mehlman - a former assistant commerce secretary for technology policy in the George W. Bush administration. The firm recently added Brian Wild, a former senior adviser to House Speaker John Boehner (R-Ohio), to lobby on this issue. It has also added ML Strategies. Amazon has hired Cauthen Forbes & Williams, the Bockorny Group, and TwinLogic Strategies.

"Congress is not anxious to run in and do this," points out Steve DelBianco, executive director at NetChoice, a group that represents numerous online retailers and resellers. "If Congress were to grant states this authority to force retailers to pay sales tax, consumers will feel it like a tax increase and Congress will be scratching its head saying, 'What do we get out of it?'"

On the other side of the issue is the Streamline Sales Tax Governing Board, a group that represents 23 states. They have hired Clark Lytle & Geduldig. Sears has hired OB-C Group. The International Council of Shopping Centers is also lobbying for Congress to step in.

"We’ve talked to lawmakers who want to support Sen. Durbin’s bill," David French, senior vice president of government relations at the National Retail Federation, tells Politico. "What has played out in the states has heightened interest in sales tax fairness."

While a showdown may be brewing in our nation's capitol on this issue, Amazon also want to put the issue in the hands of voters by proposing a referendum voters could have a say in. The company is also battling a similar law in New York in the courts. The company is doing what it can to combat new laws in Illinois and California, and in Texas it has proposed that it invests in warehouses and distribution centers in the state if it is allowed to operate for four more years without having to worry about collecting sales tax.

Obviously online sales tax collection is a murky issue and one that can be dangerous for politicians - particularly on the national stage - to get involved with. Opponents of state and federal proposals to collect sales tax online will no doubt say that what they are doing is tantamount to raising taxes on every day consumers..

Read the entire Politico report here.

Posted in

Comments

Re: Tax Wars: Online v. Brick-and-Mortar Retailers

I really don't see how it's an uneven playing field. At least not in terms of pricing. I mean sure, you don't have to pay tax online, but most of the time you pay shipping, which can oftentimes cost as much or even more than what you would pay in taxes.

I guess everyone needs something to bitch about.

 

 

"And though we may pledge fanboy allegiances to different flags, deep down inside we all serve one master, one king. And his name... is GAMING! FOREVER MAY HE REIGN!"

http://www.examiner.com/video-games-in-atlanta/mike-chrysler

Re: Tax Wars: Online v. Brick-and-Mortar Retailers

I think this whole debate is showing that our tax structure needs some kind of rethinking.

 
Forgot your password?
Username :
Password :

Shout box

You're not permitted to post shouts.
prh99Too much time listening to Faux News and Bill Mahr.01/26/2015 - 5:12pm
james_fudgeit's bad pr for the bus company01/26/2015 - 5:10pm
Andrew EisenI'm sure the ones who purchased the ads are a bit peeved but I find my sympathies lacking. I have to wonder why the bus line would buy such ads in the first place. Hard to imagine it doesn't have policies against that stuff.01/26/2015 - 5:07pm
Wonderkarpthats cute. I Like Ms Marvel(hate her powerset). Whomever is doing this? Good Job01/26/2015 - 4:49pm
E. Zachary KnightHahahahahahaha! http://toybox.io9.com/islamaphobic-bus-ads-in-san-francisco-are-being-defaced-1681857271/+charliejane01/26/2015 - 4:24pm
WonderkarpI saw that. Celebrity wing.01/26/2015 - 3:00pm
BearDogg-XArnold Schwarzenegger is being inducted into WWE Hall of Fame, reports TMZ.01/26/2015 - 11:56am
Wonderkarpyou're weird01/25/2015 - 11:23pm
ConsterWell, I guess it makes sense for your iPad to be capitalist scum.01/25/2015 - 7:10pm
WonderkarpMy Ipad likes to capitalize every word when I'm on game politics.01/25/2015 - 6:29pm
ConsterI Was Talking About You Capitalizing The Starting Letter Of Each Word.01/25/2015 - 5:56pm
WonderkarpI didnt know we were talking about Capitalism. What do mass shootings have to do with trade and industry that is controlled by private owners for profit?01/25/2015 - 3:28pm
ConsterYou do realize that what you're doing right now isn't what capitalism means, right?01/25/2015 - 2:39pm
WonderkarpActual Thing, Never Proven :P We All Know That You Dont Need Evidence For Something To Be Real, Huh.01/25/2015 - 9:40am
ConsterAh, that explains it - since the second thing you named is an actual thing, I wasn't sure if you were being sarcastic.01/25/2015 - 7:39am
WonderkarpConster, I was quoting Anita Sarkeesian01/24/2015 - 10:39pm
ZippyDSMleeodd its not wanting to post half the time 0-o01/24/2015 - 10:21pm
ZippyDSMleetest01/24/2015 - 10:21pm
ConsterWonderkarp: did the US actually bomb Japan back to traditional values? My history lessons were eurocentric, so I wouldn't know.01/24/2015 - 9:39pm
ZippyDSMleeeffect like confusion,ect. QTEs are a gimmick that can easily be shallow because you are looking to mess with conditioned responses and nothing messes with them more than random gameplay changes..01/24/2015 - 7:58pm
 

Be Heard - Contact Your Politician