June 12, 2011 in Business

Amazon tells shareholders it won’t budge on sales taxes

Amy Martinez Seattle Times
 

SEATTLE — Amazon.com Chief Executive Jeff Bezos left little doubt that the company will stand its ground against efforts in many states to require the Internet giant to charge sales taxes on their behalf.

“We think our position is a good one,” Bezos said at Amazon’s annual shareholder meeting in downtown Seattle. “And we’ll stick with that.”

Bezos also downplayed the possible threat to Amazon’s edge against traditional stores if it’s forced to collect sales taxes in more states. He noted that Amazon already does at least half of its business in places where it collects sales taxes or something similar, such as Europe’s value-added tax.

Amazon long has argued that requiring Internet retailers to navigate the varied rules and rates of more than 7,500 local taxing jurisdictions would be too burdensome.

Bezos reiterated his support of federal efforts to minimize the many differences among states on sales-tax collection from Internet retailers. Asked by one shareholder to look ahead 10 years, Bezos said, “I believe we’ll have the simplified sales-tax initiative passed.”

“I hope it might happen much sooner than that,” he added. “It’s the right thing to do, and I think it would be great for Amazon.”

The Supreme Court ruled in 1992 that Internet retailers do not have to collect a state’s sales tax unless they have a local physical presence, such as a store. As a result, Seattle-based Amazon collects sales taxes in only five states: Kansas, Kentucky, New York, North Dakota and Washington.

Amazon has closed or threatened to halt construction of warehouses in Texas, Tennessee and South Carolina rather than give in to efforts to make it collect sales taxes, and it has severed business relationships in other states that passed new sales-tax laws.


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