April 6, 2011

Another state stands up to Amazon on tax issue; will Amazon retaliate as in other states?

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It went little reported — in fact, a Google News search reveals only one report — but last Friday Arkansas Governor Mike Beebe said the thing that most state governors are bending over backwards trying NOT to say (see our earlier report on Texas and South Carolina): “We have a lot of local businesses in Arkansas, both small and large companies, that collect sales tax and we’re trying to level the playing field.” He said that immediately after signing Senate Bill 738, which “requires Internet retailers to collect sales tax if they do business with in-state affiliate web sites.”

According to a report on InternetRetailer.com (yes, the one place that reported the signing — even the state’s leading newspaper, the Arkansas Times, has no coverage of the signing on its website), “Arkansas has been working with the multi-state Streamlined Sales Tax Project toward a federal law that would require all retailers to collect sales tax, but that effort is not expected to succeed any time soon and Beebe sees the Amazon tax law as a way to bring about more immediate way of increasing collection of sales tax revenue …”

Arkansas is the fifth state to enact an “Amazon law,” after New York, North Carolina, Rhode Island and Illinois.

The story doesn’t mention if Amazon has issued actual written threats to the state, as it has to other state legislatures (see yesterday’s report about Amazon’s threats to the South Carolina legislature, or this earlier story about its written threats to the state of California, or this story about its actual retaliation against Texas), but it does note the company has “cut ties with affiliates in states with such laws, and have threatened to do so in states that are considering similar laws.”

It also notes there are ten such states: Arizona, California, Connecticut, Hawaii, Massachusetts, Missouri, Minnesota, Tennessee, Texas and Vermont.

 

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