Big News for Amazon isn't Delivered by Drone
Amazon.com's recent announcement that it is working on a long-range plan to deliver packages by drone was upstaged Monday by the Supreme Court. In this instance, the court did not deliver a momentous decision. The Supreme Court simply declined to review a lower court's decision allowing states to require Amazon.com and others to collect and remit sales taxes for purchases made remotely, online or otherwise, even if they have no physical presence in the state.
The decision leaves states free to pass legislation requiring out of state internet vendors to collect state sales tax. Amazon.com has already cut deals with 16 states to collect sales tax, and surely more states will want to find a way to get Amazon.com to collect taxes on their behalf as well. The Supreme Court's refusal to get involved likely means that the entire matter will wind up in the hands of Congress….oh, dear!
Though the Marketplace Fairness Act has been passed by the Senate, the measure is now stuck in the House of Representatives where it will presumably stay indefinitely. At issue is an estimated $23 billion that states are losing each year from out-of-state internet merchants who do not collect state sales taxes.
As internet sales continue to get a bigger piece of the retail pie, states will either need strong internet sales tax laws, or they will certainly suffer from declining sales tax revenue – unless of course Congress takes action. What do you think the chances are?
– Art Johnson
writer, blogger, social media consulting