James Tenser

Amazon Cuts Off Colorado Affiliates Over Taxes

March 15, 2010

FROM RETAILWIRE:
Amazon last week ended its relationship with Colorado-based affiliates in retaliation of a new state law aimed at getting out-of-state, online retailers to collect sales tax. Do you support e-commerce sites being tax-free or should e-tailers be required to pay the same levies as physical store locations?      [more...]

I'm astonished that any controversy remains on this decade-old issue. State and local sales tax is the law. Period. Catalog and online retailers have been able to dodge the law in the past because they argued that the mechanism for tracking and calculating it across multiple municipalities was too burdensome. There was also a cult of mysticism around virtual retailing that is no longer warranted.

This is no longer the case, as there are numerous Web services today that maintain the requisite sales tax databases and can be seamlessly plugged in to any online shopping cart or call center terminal. Amazon is not entitled to a sustained competitive advantage due to its business model. A sale is a sale, and the recipient of a delivered purchase should pay tax based on their local code. The states and towns of America need these revenues desperately, and if the playing field were leveled, individual affiliate sellers would be no better and no worse off than they are today.