Just a few months ago, the giant retailer was filing lawsuits and dropping affiliates to combat states trying to charge online sales tax. Now, Amazon is on board.
As states have struggled to find new tax revenues over the past couple of deficit years, many have sought to levy sales tax on online transactions. In most cases, the sales tax is not charged when you buy online; while most state laws require online shoppers to declare purchases and pay a “use tax” on goods at the end of the year, almost no one does. And when states tried to force retailers like Amazon to make the tax collections, they were met with determined resistance.
Amazon dropped local affiliates in Connecticut, Illinois and elsewhere this year, to protest attempts to impose the sales tax, which were justified legally because the company had a physical connection to the those states. In California, the company threatened to overturn a similar provision in a voter referendum, and also went to court. (The Street has a handy map of the states in which Amazon was fighting sales tax battles.)
But now, the Los Angeles Times reports, the company is signing on to a bipartisan federal bill that will clear the way for states to more easily charge sales tax for online commerce, erasing an advantage online businesses had over brick-and-mortar competitors, and speeding a new revenue stream to cash-strapped governments without having to get a cent of new spending through a clogged Congress.