A recent opinion piece in the New York Times argues that Amazon ought collect sales tax on goods bought by customers in states where, currently, Amazon does not collect any sales tax.
Here’s a bit of reasoning offered by Jeff Bezos for the conclusion that Amazon ought only pay sales tax in the state of Washington, Amazon’s corporate headquarters.
In 2000, Mr. Bezos appeared before booksellers attending BookExpo America and presented the case why his company shouldn’t be compelled to collect sales taxes for purchases made by customers other than those who lived in Washington.
“In Washington State, where we have a presence, we get police protection, we get fire protection. We send our kids to local schools,” he said, according to The Associated Press. He said he didn’t understand why, “since we get no services from North Carolina, that they should be able to force us to collect taxes for them.”
The op-ed addressed this argument in part by saying.
That was then. Today, employees of Amazon’s wholly owned subsidiaries presumably get police and fire protection and other services even though the company is not collecting sales taxes in the states where they’re located.
I want to extend/elaborate on this response.
Amazon’s business model is a mail-order shipping model, and so it relies on any state government resources that grease the wheels for a mail-order business model. Any local state funds that help in the maintenance of roads, for example, allow Amazon’s shipping business-model to run smoothly. This extends beyond the mere physical upkeep of the roads. The mere fact that state governments have police, fire, and EMT to deal with accidents and keep traffic running smoothly benefits Amazon’s shipping model.
I live in a community where packages shipped from Amazon can be left on our front porch, and I’m not worried about these goods being stolen. If it weren’t for our local law enforcement, I would not risk purchasing goods from Amazon. That’s another way in which Amazon’s business model benefits from local government resources.
Bezos seems willing to concede that Amazon ought to pay sales tax in states where Amazon benefits from the resources that are provided by the state. My claim is that Amazon benefits from resources provided by any state where it ships. So, given Amazon’s own concession – they ought to pay up in all 50 states.
I take it the collection of state sales taxes is what’s at issue here. If I’m correct that the issue is the collection of state sales taxes, them I’m confused by Bezos’s reply. That Amazon gets provided with certain services may explain why it should pay taxes, but it’s completely irrelevant as to why it should collect taxes. Bezos’s reply simply misses the point.
Matthew,
He wasn’t missing the point. North Carolina is forcing him to do their dirty work for them. He’s asking why he’d be beholden to perform services for North Carolina when he doesn’t live there and doesn’t get anything from them.