When Walla Wallans buy books, sporting goods or anything else online from Washington-state based Amazon.com they must pay sales tax. The law clearly states customers must pay state sales tax if the online retailer has a physical presence in that state.
But Amazon -- true to its giant-like name -- is using its size to pressure states to not collect sales tax. The company claims, for example, that a warehouse such as the one it has in Texas is not a physical retail presence so no taxes are collected.
And when Texas put pressure on Amazon to pay the sales tax it threatened to move out of the state and takes jobs with it.
California has been fighting a similar battle -- one worth about $200 million a year in tax revenue.
But Amazon and California have recently reached a compromise or, perhaps, a truce. Amazon has agreed to start collecting sales tax from its California customers in one year unless Congress steps in to take action that would absolve Amazon of that responsibility.
Amazon apparently believes its lobbyists can convince senators and representatives it's in the nation's best interest -- as well as equitable tax policy -- to allow Internet merchants to sell their goods sales-tax free.
We would think that's going to be a tough sell (taxed or untaxed) for Amazon. It's simply not fair to allow cybermerchants to sell their goods tax free -- essentially offering a 3 percent to 10 percent discount -- while the folks who own stores on Main Street and elsewhere have to collect taxes.
We would hope Congress would take action to ensure the brick-and-mortar merchants in California, Washington and every other state that has a sales tax would have a level playing field to compete with Internet merchants.
The public benefits as many state governments would, collectively, be infused with billions of dollars to fund schools, law enforcement and other critical needs.
Congress needs to take action that forces all online retailers, not just those with a presence in a particular state, to collect sales taxes. The current state-by-state approach is unfair to brick-and-mortar merchants as well as smaller Internet retailers. It allows cybergiants such as Amazon to threaten to move out of states and take jobs with them unless taxes are waived.
The issue of online sales tax collections has been lingering for far too long. Congress needs to settle this matter is a way that best serves the nation.