Tuesday, November 15, 2011

In Which I Reverse My Position

Previously, I had written about why I was dropping my Amazon Associates status and how I was going to stop shopping at Amazon. It wasn't a decision I made lightly, since shopping Amazon is convenient and frequently, a great deal. But at the time, Amazon's treatment of its associates (particularly the ones in California) was to my mind, unethical--as was its failure to contribute sales taxes to the states that hire our teachers and public safety personnel.

So imagine my delight when Monday morning's news flash from The Atlantic Wire stated that Amazon was backing a bipartisan piece of federal legislation dubbed the Main Street Fairness Act. Now, all of us are aware that Congress has an affinity for naming legislation in a manner that can be misleading, so I made sure I had all the data before I bought into this one.

Amazon has been filing lawsuits at a great rate in order to avoid collecting sales taxes. Amazon is not alone in this behavior, but Amazon's very size makes it the retailer with the greatest individual impact on the issue. So this news would indicate that the legislation in question, since it has the support of this retail giant, has a pretty good chance of making it through both Senate and House and the final reconciliation. Shocking!

The trouble no doubt started because each state has its own way of doing business. Some states have required payment at dozens of sites, as opposed to a central address. Imagine if you are an online business trying to collect taxes--and you can't figure out where to send the check. I can see their point. But the loss of revenue to the states ($7.7 billion in 2008) has been a huge hit to the ability to provide public services.

That loss of revenue has finally goosed the states, however. Twenty-four states* have already completed and passed legislation putting them into a group using the Streamlined Sales and Use Tax Agreement that has standardized definitions and a single location designated in each state for the purpose of sending payments. Twenty more states are on the verge of adopting the same Agreement. The Senate bill would require that states that wish to collect sales taxes from online businesses must adopt this (state-initiated) Agreement. So essentially, the states decided to get their act together and the federal government has decided to make it a smidge easier for them to do what they want to do--reclaim revenues that have been lost to online sales.

Was this legislation and Amazon's support of it just something who's "time had come?" Has the Occupy Wall Street movement/We Are the 99% had an impact on our legislators and/or Amazon?

I don't really have to know who to give credit to, I'm just glad to see the change coming. And it's not a done deal, yet. Be sure to contact your legislators and encourage them to pass this bill, which gives states the power to decide for themselves if they wish to collect online sales tax revenues. Then you can nag your state representatives to adopt the reconciliation!

U.S. Senators          U. S. Representatives  

I'll be recreating my Amazon Wish List. And when the Main Street Fairness Act gets passed, it might be time for me to do a little shopping.  :)

Sources: Amazon Will Go Along, States Eye Online Sales Taxes To Help Close Budget Gap, Internet Sales Tax Fairness 

*Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.


Ellen Honeycutt said...

I appreciate your update!

chacha1 said...

Thanks for this, I am going to harass Mr. Waxman and Ms. Boxer right now! CA should definitely be on that list!

R K Young said...

Just doin' my job, Ellen! Chacha, from what I read, California's system may be so complex that they have to use an alternative method instead of the Streamlined Sales and Use Tax Agreement. But the language of the federal legislation was open enough that if a state drafted a method of meeting the same goal (single-payee, I imagine) the legislation would make that new method possible. So it may be the STATE reps you need to harass, first!

R K Young said...

New article out today in Business Week: http://www.businessweek.com/news/2011-11-30/amazon-executive-asks-congress-to-address-online-taxes.html

Further clarifies where online business stands. The legislation to allow states to collect these sales taxes deserves our support.

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