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Congress to take up Internet sales tax issue plaguing Amazon

Friday, July 29, 2011   (0 Comments)
Posted by: Donna Davis, Chief Executive Officer
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Congress to take up Internet sales tax issue plaguing Amazon

Aislyn Greene on Friday, July 29, 2011, 1:58pm PDT

It looks like Amazon's dispute with states over collecting sales tax on online purchases will be taken up by Congress.

Sen. Dick Durbin (D-Ill.) is expected to introduce a bill that would allow states to require all retailers, including online stores and brick-and-mortar retailers, to collect sales tax, reports Politico.

The bill is called the Main Street Fairness Act and is co-sponsored by Sen. Tim Johnson (D-S.D.). A similar bill is expected to be introduced in the House by Rep. John Conyers (D-Mich.) and Peter Welch (D-Vt.).

The action comes on the heels of Amazon's recent refusal to comply with a California law that required online retailers to collect sales tax. After the bill was signed into law by Gov. Jerry Brown, the online retail giant cut ties with 10,000 affiliates in the state.

Amazon's battle with states over sales tax has heated up in recent years. Cash-strapped state governments have continued to pass legislation requiring online retailers to collect sales taxes, legislation that Amazon has fiercely resisted. In response, the retailer has cut ties with all affiliates in Connecticut, Illinois and Arkansas. It's currently collecting sales tax in New York, but has challenged the state law as unconstitutional.

In California, Amazon is now backing a referendum to overturn the law.
However, in spite of its heated squabbles with state governments, Amazon is expected to back the bill. According to the L.A. Times, the retailer wrote to Durbin and Conyers on Friday, saying it would support a national effort to create "a simple, nationwide system of state and local sales-tax collection, evenhandedly applied to all sellers, no matter their business model, location or level of remote sales."

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