Amazon (and others) face the taxman
Amazon and other businesses that sell over the Internet without paying state sales taxes are coming under more and more pressure from revenue-hungry state governments. Several states have already passed laws that get around the federal government restrictions on out-of-state taxation and it is inevitable that more states will follow.
Not paying sales tax represents a nice pricing advantage for Internet vendors and Amazon has a big business with billions in sales. So how will Amazon and the like be affected if they lose their tax-free edge? I know that I might end up buying more at Barnes & Noble and less at Amazon. However, MarketWatch reports that analysts believe Amazon might not be hurt much by having taxes added to its costs:
Amazon.com Inc. is clearly nervous about the issue of collecting sales tax, but several analysts believe the e-commerce giant would still do well even if it had to tax all sales at the same rate as its traditional retail rivals.
Of course, this may be a moot issue in the future since I strongly suspect that a federal value-added tax will have to be instituted to help pay the enormous federal debt.
How about you? Would you buy more from local merchants if Internet purchases were taxed at the same rate as local purchases?
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