Amazon, Nexus and Main Street Fairness


Illinois Senator Durbin presses forward with Main Street Fairness Act

Illinois and South Dakota senators are heading up the Main Street Fairness Act in Congress while Tennessee governor Bill Haslam is geared up to lead the national movement. According to Haslam, not requiring Internet retailers to collect and remit sales tax isn’t “…going to begin eroding the state’s tax base; it already is.” In addition to Senators Durbin (D-IL) and Johnson (D-SD), Senator Jack Reed (D-RI), Representatives John Conyers (D-MI), Peter Welch (D-VT) and Heath Schuler (D-NC) support the bill, which has also been endorsed by Sears Roebuck & Co. 

Durbin states “consumers shouldn’t have to face the burden of reporting all of their online purchases.” In addition, he reiterates that this is not adding a new tax but enabling an existing tax to be collected with the least amount of burden on the consumer. Small businesses would be “exempted from collecting online taxes, subject to the governing board of the agreement.”

PRNewswire agrees, stating “The Main Street Fairness Act would not raise anyone’s taxes, but would simply require online-only retailers to collect sales taxes at the point of purchase like every other retailer.” According to the Retail Industry Leaders Association (RILA) executive vice president for public affairs, Katherine Lugar, “For too long U.S. tax policy has favored online-only retailers over the brick-and-mortar stores that create jobs and serve our communities. Government shouldn’t be picking winners and losers by giving a handful of companies a competitive advantage over everyone else. It’s time to close this decades-old loophole and level the playing [field] for all retailers.”

Amazon has expressed its support of “…a federal simplified approach.” But in contradiction, Amazon is still battling collecting and remitting sales tax on a state-by-state basis using the nexus rule as its justification.

Across the U.S. in the desert Southwest, Arizona businesses are beginning to question whether Amazon has justification. They feel Amazon already has nexus in their state and should be collecting now.

According to one business owner, “…when the governor of Arizona stands at the new Amazon warehouse, looking over the X-square feet, this is a business doing business in Arizona.” Amazon has three fulfillment centers in Arizona. “…[S]mall business advocates have argued that the company does indeed have a presence in the state and that letting it get away without collecting sales tax creates an inequity in the tax code.” Amazon currently does not collect sales tax on purchases made online by Arizona residents. Arizona residents are required to pay a use tax on those purchases.

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