Wal-Mart is secretly backing a group that is trying to get states from California to Illinois to collect sales tax from Amazon on its affiliate sales.Affiliates are people who earn commissions on online sales because they generated that sale; so for example a blogger who reviews a book might get a cut of sales of that book to anyone who buys it through her site. Affiliates are anyone from individuals making a few bucks to businesses who make their living from it.
The states are ostensibly doing this to plug their gaping deficits, but when they pass the laws, Amazon just cuts off their affiliates, so the states get nothing.
The Amazon tax laws are lobbied for by a group called the Alliance for Main Street Fairness. And their biggest member, reports GeekWire, is Wal-Mart.
Wal-Mart is trying to sock Amazon with a tax increase instead of competing with them fairly.
It’s worth pointing out that on the merits, it’s Amazon that is in the right, here. A Supreme Court decision says it’s unconstitutional to force retailers to collect sales tax in states where they don’t have “nexus”, or a strong presence. Amazon does collect tax in states where it does. It’s backing something called the Streamlined Sales Tax Initiative, which is backed by many states and would make sales tax collection easier by making definitions and regulations uniform at the federal level.
GeekWire goes on to argue that Amazon will lose this fight over the long term because of poor marketing and lobbying: Amazon plays the role of the faceless corporation that won’t play tax, and the lobbyists on the other end of the issue have been very good at framing them.
That’s one way of looking at it. But we would never bet on Jeff Bezos failing at something.
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