Now Amazon Supports Letting States Collect Sales Tax On Web Purchases


After years of fighting against similar measures, Amazon is now supporting a bill that would allow states to collect sales tax from online shoppers, even if the seller ships from a different location than shoppers.

The “Marketplace Fairness Act,” sponsored by Sen. Dick Durbin and Sen. Lamar Alexander, says states can acquire sales tax based on where the product ships.

So in a situation where a Californian buys from a Wyomian and then ships the item to a New Yorker, for example, New York would collect the sales tax.

Amazon decided to give up its fight against the measure after it realised it would only be so long before the states would want to stop losing millions of dollars in sales tax every year from online purchases, reports Brad Turtle of Time’s Moneyland.

And rather than fight each state individually–Amazon brawled against California for a while–it seemed better to negotiate with a federal standard.

Also Amazon has a solid enough reputation that it felt the measure wouldn’t alienate customers who have grown accustomed to its convenience. Even if an item costs the same at Walmart, most Amazon customers would rather stay at home and shop.

Other online retail giants, like eBay, still disagree with the sales tax mandate. eBay fears its smaller e-vendors, who already struggle with the big guns like Amazon, might not be able to compete with the tax burden. However, the mandate would not apply to any business generating less than $500,000 annually.

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