- President Donald Trump attacked Amazon in a tweet on Monday, saying, “The Amazon Washington Post has gone crazy against me ever since they lost the Internet Tax Case in the U.S. Supreme Court two months ago.”
- In the case that Trump is referring to, the Supreme Court ruled that states can collect sales tax on purchases that residents make, even if the sale comes from out of state.
- Despite Trump’s claims that Amazon “lost,” the company will likely see either no change or a small net benefit as a result of the ruling, experts say.
President Donald Trump took another swing at Amazon in a tweet on Monday.
“The Amazon Washington Post has gone crazy against me ever since they lost the Internet Tax Case in the U.S. Supreme Court two months ago,” he tweeted.
The decision he’s referring to, released on June 21, paved the way for states to force online merchants to collect sales tax on orders from residents, regardless of where the company itself exists. Previously, federal law said that a state could only force an online store to collect sales tax if it had a “physical presence” in that state.
Trump’s incorrect assumption, apart from conflating the two Jeff Bezos-owned businesses, is that states will now be able to force Amazon customers to pay state sales tax on all orders. But, Amazon had already charged sales tax for all 45 states that have one.
Several other retailers signed on to the lawsuit, South Dakota v. Wayfair, including discount retailer Overstock.com, tech retailer Newegg, and, of course, home-goods retailer Wayfair. Amazon was not party to the suit.
Somewhere along the line, Amazon got so big that it now has what could be called a “physical presence” (in the form of fulfillment centres) in nearly every state, and so it decided to start charging sales tax in every state that levied one.
In a way, Trump’s conception of internet sales tax is dated.
“It would have been a bigger deal for Amazon if this ruling has been made 10 years ago,” Sucharita Kodali, a vice president and principal analyst at Forrester Research, told Business Insider at the time of the ruling. “At this point, it won’t affect Amazon in any material way. They have been easing into this for years.”
Daniel Ives, chief strategy officer and head of technology research at GBH Insights, called it “a net slight negative for Amazon, but not a dynamic we view significantly moving the needle,” meaning Amazon likely won’t see much effect from it, at the time.
The slight negative is in regards to Amazon’s third-party sellers.
“Some Amazon third-party sellers will now have to assess taxes on shoppers, but I don’t think it will come as a shock to customers,” Kodali said.
Customers are used to paying tax online now, and they expect it if they’re in states that levy one. There are plenty of other benefits to shopping online, and customers are already used to the convenience it provides.
Now, all internet retailers will be on equal ground with regards to charging sales tax – the ground Amazon was already occupying.
Trump has tweeted attacks on Amazon before, often criticising its tax status, blaming it for the demise of traditional retail, and linking it with the Washington Post, which runs critical coverage of Trump and is also owned by Bezos. Trump is reportedly “obsessed” with the internet retailer.
He’s also called the US Post Office Amazon’s “delivery boy,” citing the deal the company gets on sending a large volume of packages. However, Amazon is far from being the only American company that benefits from the USPS’ current pricing plan.
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