Amazon Sales Tax Battle Roundup

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Amazon.com has been battling with states across the country over whether or not the company should collect sales taxes. The company’s practice of not collecting sales taxes in most states makes it difficult for brick-and-mortar stores to compete with their prices, and also keeps tax revenue out of states’ coffers in a time when many are struggling with budget deficits.

Many states are fighting back with so-called “Amazon laws,” which require online retailers to collect sales tax if they have physical affiliates within the state.

Illinois recently passed the Mainstreet Fairness Bill. Amazon has countered by threatening to terminate relationships with affiliates in Illinois and in other states with similar legislation. The Alliance for Main Street Fairness has launched this web site to connect affiliates “about to get thrown under the bus” with other online retailers who do collect sales taxes.

Last fall, Texas sent Amazon a bill for $269 million dollars in back taxes. Amazon responded by closing their Texas warehouse, and the dispute is still unsettled.

By 2012, online retailers will owe states an estimated $23 billion dollars in uncollected sales taxes.


Jill Haberkern has lived in a one-room house made of tombstones and a farmhouse with a walrus head. She currently lives in Berkeley, California, with neither. Her writing has appeared in the Mid-American Review. More from this author →