question of the weekend: If Amazon (and other online retailers) are forced to collect sales tax from you, will that change your online shopping habits?
An editorial this week in The New York Times commented on Amazon.com’s current fight with the state of North Carolina, which is battling the retailer over the issue of collecting state sales tax.
Right now, the law is that only if an online retailer has a physical presence in a state — such as offices or brick-and-mortar stores — must it collect sales tax. Sales tax is still due otherwise, but the buyer is supposed to voluntarily send it in to their state coffers, which of course never happens.
From the Times:
Enter North Carolina. Unable to get Amazon.com to collect the taxes, the state recently began an audit of online businesses, trying to track down what it assumes are millions of dollars in uncollected taxes. The state has told Amazon that it wants buyers’ names and the amounts they spent. That state also needs to know the general categories of spending, like books or movies or food, because some items are tax exempt. Amazon has refused to comply, claiming in federal court that North Carolina may be able to learn the titles of books and movies that its customers have bought, imperiling privacy and free speech. North Carolina officials have said they are not seeking those details. Now it is up to the court to decide whether Amazon will have to reveal the names of customers, without titles.
This case is not really about privacy and free speech. It’s about how far Amazon is willing to go to protect a business model that relies on not collecting sales tax. Noncollection gives Amazon a major unfair advantage over rival retailers that do collect sales tax and deprives hard-pressed states of much-needed revenue.
(There’s more on Amazon’s privacy and free-speech argument at a reported article at the Times, and it’s not quite as specious as it might sound. And there are many complicated legal issues involved, too.)
Thing is, I’m not sure that Amazon’s model depends upon it not collecting state sales tax. Amazon’s model seems, to me, to be about choice and convenience. I buy a lot of stuff on Amazon, and yet when a recent new law (which Amazon is appealing) compelled Amazon to begin collecting state sales tax in New York in 2008, I honestly barely noticed. And I can’t imagine not shopping on Amazon: I’d really rather not run around to the few physical stores that stock, say, DVDs, because those stores are not likely to have what I’m looking for. And if I did find the DVD I wanted, I’d still have to pay sales tax on it. Yes, I’ll have saved Amazon’s shipping costs, but I’d have wasted a lot of time that I don’t have to waste.
So this weekend’s question (which comes via reader bronxbee):
If Amazon (and other online retailers) are forced to collect sales tax from you, will that change your online shopping habits?
(If you have a suggestion for a QOTD/QOTW, feel free to email me. Responses to this QOTW sent by email will be ignored; please post your responses here.)
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