Saturday, July 30, 2011
Facing a persistent budget gap, California recently passed a law that requires Internet retailers to collect sales tax if they have affiliates or subsidiaries in the state. Amazon, the world's largest online merchant, is fighting back, trying to get a referendum on the ballot to exempt virtual sellers with only a modest physical presence in California. The stakes are huge: the state is likely to forgo $1.9 billion next year in taxes on online sales, according to a University of Tennessee study.
Other states are watching the case closely. On Tuesday, Amazon said that it would collect sales tax only if there were a federal solution, rather than a patchwork of state-by-state laws.
Should states require online retailers like Amazon to collect sales taxes?
- Danny Diaz (Alliance for Main Street Fairness), Play by the Same Rules
- Kelly Phillips Erb (TaxGirl Blog), Define "Fair"
- Nancy F. Koehn (Harvard Business School), The Main Highway of Commerce
- Daniel J. Mitchell (Cato Institute), Opening the Door to Higher Taxes