Presidential Campaigns Urge New Taxes on Internet Sales
Last fall, now-presumptive Democrat nominee Hillary Clinton said “she supported allowing cities and states to tax online purchases” though Reuters noted at the time “she would not mandate it.” Her position mirrors that of the Senate-passed Marketplace Fairness Act, which would allow states to impose taxes on online sales in a way that favors their local businesses over out-of-state firms that have no representation in the taxing state.
Yesterday, presumptive Republican nominee Donald Trump appeared to embrace Clinton’s position on the internet sales tax, telling radio host Hugh Hewitt “…that Amazon doesn’t pay tax. … And a lot of people think Amazon should be paying tax, and they’re not, and they’re destroying department stores and retailing all over the country…”
“Forcing online retailers to act as tax collectors for states in which they have no representation is a bad idea,” Heritage Action’s Chief Executive Officer Michael A. Needham said. “There is nothing fair about forcing a small, online business in Tennessee to play the role of tax collector for California. Presidential candidates should turn their attention to creating opportunity for everyone, not doling out favors to well-connected businesses and revenue-hungry state governments.”
Amazon supports internet sales tax legislation. Back in 2013, National Public Radio explained why the world’s largest online retailer would support raising its own costs:
“Collecting state and local sales tax all around the country would require a fair bit of effort on the part of online retailers, because sales tax rules vary from state to state. That’s not a huge deal for a giant company like Amazon, but it would be more of a burden for smaller online retailers. From Amazon’s point of view, that’s a good thing — it makes life harder for Amazon’s smaller competitors.”
Amazon pays taxes. The same NPR story explains that Amazon “agreed to start paying sales tax in more states — and it started building huge warehouses near major metropolitan areas in those states.” While the company’s physical presence required it to charge sales tax, “having warehouses closer to big cities also allowed Amazon to start offering same-day delivery to millions of customers.”
Young Americans oppose internet sales tax. In 2013, Gallup noted that “If Republicans in the House oppose the Internet sales tax bill, that may help the GOP’s appeal to younger Americans, a key demographic in the party’s plan to build support before the 2014 and 2016 elections.”