Emphasis mine. They're fighting a war on multiple levels.
-wraith808
Agree. But I also think this move is a well thought out transitional strategy.
Too many states are getting increasingly strident about the sales tax issue. And with the federal government cutting state level funding now that so much has been spent on homeland security and the never ending war on terror, the money needs to come from somebody. And the feds are not about to introduce new taxes if they can possibly avoid it. Nor do the states want to do the same.
Unfortunately, the common practice of cutting back on state funding to its own municipalities is reaching a limit now that the municipalities are pushing back because
their property and local taxes have been increased to the absolute threshold of what their residents can still afford to pay.
So the current state of affairs with online retailers
not charging sales tax is a temporary one at best. And it will be a quick tech fix on most order entry servers once they're required to collect it. So it's not as if it impractical or not doable from an order processing perspective. It's just a sku + zipcode + tax table lookup + calculation loop on their system. No big huhu. This stuff is old hat - and the code has already been written anyway. The computer handles the heavy lifting so it's really just a "set & maintain a tax database" thing.
About the only tricky part will be if somebody in state A buys something - but has it shipped to an address in state B. In most places that wouldn't be taxable under current 'destination-based' sales tax laws. In my state something purchased with the intent of shipping it out of state within 30 days, and actually shipped within that grace period, is usually exempt since we're a destination-based state for sales tax purposes.
I think Amazon saw the writing on the wall and decided to move quickly to capitalize on the current state of affairs while it still existed.
A year or so from now, when charging sales tax is the norm, there won't be any point to approaching states to cut a deal.
Unless somebody gets enterprising and gets most states to switch over to 'origin-based' sales taxes. If that happens, then it becomes a
very attractive proposition to get a business like Amazon in-state. Because under that scenario, the hosting state would (theoretically) receive sales taxes on ALL the transactions.
(Note: It wouldn't really be
that simple. But it would still be advantageous to be the hosting state for a mega-retailer. And for far more than just the 'job creation' opportunities.)
Recent Posts
anyway.