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The latest news from Amazon: The giant online retailer is supporting an internet sales tax.Here’s the deal, it’s called the Marketplace Fairness Act (download the bill here), and it’s supported by both Republicans and Democrats in the Senate. It seems to have a real shot at passing, according to analyst Ben Schachter at Macquarie.
Here’s what Amazon said in a statement:
Amazon.com, Inc. (NASDAQ: AMZN) today confirmed its strong support for the federal bill introduced this morning by United States Senators Enzi, Durbin, and Alexander, that would create a constitutional framework for collecting sales tax online.
“Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed,” said Paul Misener, Amazon vice president, global public policy. “It’s a win-win resolution – and as analysts have noted, Amazon offers customers the best prices with or without sales tax.”
If enacted, the Enzi-Durbin-Alexander bill will allow states to require out of state retailers to collect sales tax at the time of purchase and remit those taxes on behalf of customers, and it will facilitate collection on behalf of third party sellers. Thus, this bill will allow states to obtain additional revenue without new taxes or federal spending and will make it easy for consumers and small retailers to comply with state sales tax laws.
So why are they supporting it? Obviously not because Amazon has any special concern with state funding.
All you have to know is that eBay — whose business is based much more around servicing small retailers — is against it.
“EBay’s Bieron contended that the small-business exemption is too low. The House bill has a $1-million sales exemption. And the California law exempts companies that do less than $1 million in annual sales in the state alone… EBay would like to see any federal law use the Small Business Administration’s definitions of a small business, which range from $7 million to $30 million in annual sales, depending on the industry.”, “Sen. Enzi “and Durbin said they would move to the House bill’s $1-million exemption if there was consensus for that in the Senate.”
So basically, Amazon, because it’s huge, can afford a higher tax, and is calculating that it will be worse for other retailers.
This is a classic Wal-Mart move. Back during the Obamacare fight Wal-Mart came out in support of a plan that would require an employer mandate. Essentially, it supported requiring everyone to do what it did already, which is provide health insurance to employees.
Also over time, Wal-Mart has supported a higher minimum wage, which again, is a way of turning the screws to smaller businesses.
Amazon has always been the Wal-Mart of the internet from a retail perspective. Now it’s getting there in terms of playing politics.
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