PHOENIX -- State senators are poised Thursday to force Internet retail giant Amazon.com to start collecting -- and paying -- sales taxes on its purchases by Arizona residents.
The legislation is designed to close what Sen. Al Melvin, R-Tucson, said is a loophole in the law that lets some companies that do business in Arizona escape the levy. He said the issue is not so much getting more money for the state but a question of fairness.
"The way I look at it, it's a jobs bill,'' he said. "We're trying to save the brick-and-mortar store jobs.''
He said they already have a hard enough time competing with online retailers. Melvin said there's no reason they should be put at a further disadvantage because they have to collect the state's 6.6 percent sales tax and Internet retailers do not.
Melvin's legislation, SB 1338, does not name any retailer in particular. But the senator made it clear it is aimed squarely at Amazon.com.
The problem is that federal law generally prohibits one state from imposing its sales tax on products shipped from a retailer elsewhere that has no physical presence in the state. The Seattle-based retailers has argued that applies to its operations.
SB 1338, in essence, would expand the definition of what constitutes physical presence in the state to also include warehouses and distribution centers. That clearly would take in Amazon.com which has three of what it calls "fulfillment centers'' in Arizona.
The company has so far refused to comment on the legislation. And its Arizona lobbyist said he has not been authorized to discuss the issue with the media.
But if the experience elsewhere is any indication, the company will go along with some version of the law.
In Virginia, where Amazon.com has two fulfillment centers, the company reached a deal with the state to begin collecting sales taxes on goods sold to that state's residents beginning Sept. 1, 2013.
That was cemented earlier this week when the Legislature gave final approval to its "Tax Fairness Bill.'' It contains provisions similar to what Melvin is pushing here.
Even if approved, Melvin's measure would still not capture taxes on all Internet sales.
Merchants without an Arizona warehouse still would be able to avoid collecting the levy. And Amazon would be able to exempt itself again by shuttering its fulfillment centers here.
Melvin said the ideal solution would be for Congress to approve a federal law requiring all Internet retailers to compute and collect the taxes of the state where the item is being shipped.
"Both parties, Democrats and Republicans, are working on this at the federal level,'' he said.
"Who knows when they'll get it done,'' he continued, pointing out that Congress has debated whether to allow drilling in the Arctic National Wildlife Refuge for 30 years. "But I'm sure they will get it done.''
Melvin acknowledged that if his bill becomes law, Arizonans who order products from Amazon.com and other similarly situated online retailers will end up paying more, what with the added tax. But the senator said that is justified.
"Most people that I've talked to have said if I have to choose between a tax break buying online from a warehouse or a distribution center here or possibly saving some jobs in retail, I would forego that little tax break for the jobs,'' he said.
tededitedit posted at 6:57 pm on Wed, Mar 7, 2012.
Seems like the "no sales tax online" thing helped promote the growth of internet retailers. They are big and strong now. The applicable taxes should go to where the purchase is made for. If you go to Arizona and buy something , Arizona should get the tax. If you order something from Colorado and have it shipped to your niece in Arizona then Arizona should get the tax. If Colorado buys from Colorado then Colorado gets the tax. If this system was made more fair, along with a crackdown on all the non-profits that skirt taxes even though they generate profits for themselves and their sponsors, then our taxes would probably go down!
Rich posted at 8:42 pm on Wed, Mar 7, 2012.
Please, go down? All you're talking about is giving the state more of your money to waste. To finance policemen to be sure you buy a booster seat and a dog leash, and probably a hundred things you neither know of or really care about. Mo money. mo money, mo money, that's all they care about and all they really give you in return for it is anarchy.
atfsux posted at 4:13 am on Thu, Mar 8, 2012.
Thanks for killing my job.
I only got this job at Amazon because they picked up and left Texas over this same bullspit. Additional warehouses here opened because they left California as well. Looks like New Mexico is going to be getting a bunch of jobs from Amazon soon. Maybe I'll get to transfer, maybe not.
Thanks for killing the golden goose, fools!
wgauthority posted at 6:22 am on Thu, Mar 8, 2012.
Let's have a look at this. REPUBLICANS pass a 1% TEMPORARY sales tax that they now want to make PERMANENT! REPUBLICANS want to increase sales tax revenue by taxing internet sales! Since when did the REPUBLICAN party join the Democrats as the parties of TAX AND SPEND? Government needs to do the same thing that tax payers do during hard times, its called "LIVE WITHIN YOUR MEANS" !!!!!!!!!!!!!!!!!!!!!!!!
TEAPARTYJUNKIE posted at 8:42 am on Thu, Mar 8, 2012.
Republicans do not want to increase taxes. This is about fairness. It's about supporting local businesses. It's about the fact that small business owners are critical to our local economy, and they are being slowly suffocated thanks to the fact that they HAVE to charge upwards of 10% more (city + state tax) on the same product as Amazon. If Amazon wants to come and open up storefronts in all of our empty strip malls, then go right ahead. If not, then it needs to be an even playing field.
WestwardHo posted at 10:58 am on Thu, Mar 8, 2012.
Fair enough. If the Republicans don't want to increase taxes and this is about fairness and supporting local businesses, then where is the legislation to do away with the state sales taxes so the local businesses can be on a level playing field with Amazon?
DrJCA1 posted at 2:59 pm on Thu, Mar 8, 2012.
I'm confused as to why the internet was ever treated differently from any other place that sells things at retail. If someone buys anything from a store, they pay the state sales tax for that state. It has nothing to do with where it was made or shipped from. Those of you who just love this on-line manure can someday explain to your children why there are no real stores anywhere and why you cannot take the kids out for a fun day of window shopping, a treat, and perhaps a movie. Think urban blight is bad now? Just wait until you on-line freaks destroy all brick and mortar places. You will be so proud of your totally decayed downtowns and your big, fat behinds when you spend half the day in front of your computer and the TV. "Gee kids, go watch them make holiday cookies on TV or the computer and imagine what they smell like". Future generations will miss out on so much real things. Very sad.