Morning Coffee Mar 17 2011

Amazon Under Fire

By john shinal

The legislative push in a growing number of states to force Amazon.com to start collecting sales taxes isn't wholly a grass roots movement, The Wall Street Journal reports. The online retailer's biggest bricks-and-mortar rivals, including Wal-Mart, Target and Home Depot, are helping to bankroll a coalition called the Alliance for Main Street Fairness that is pushing states to level the playing field on retail taxes.

Some of the largest states, including Texas, California and Illinois, have already passed or are debating laws that have prompted Amazon to sever its relationships with sellers in those states. The legislative battle highlights the fact that for 15 years the Internet's growth has been fueled by friendly U.S. tax law, which requires only retailers with a physical presence in a state to charge sales taxes there.

As more offline retailers ramp up their online commerce to better compete with Amazon, the ecommerce pioneer may have to soon start spending less on technology and more on lobbying. (WSJ)



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