Seattle Times calls out Amazon as tax-dodging bad corporate citizen
Wednesday, February 16, 2011 at 11:58 am
The Seattle Times editorial board sits literally across the street from Amazon.com headquarters. It has watched the famous online retailer grow and grow and grow. Today the newspaper editors call out their neighbor for the “slick strategy” it has adopted in dodging sales taxes “all across America.” The company is “the internet’s widest and deepest source of products,” the editors write, “which makes it too big to be excused from its obligations.” It’s a sentiment sure to be shared among the Colorado lawmakers who tried and failed last year to begin collecting sales taxes on Amazon purchases made in the state.
From the editorial:
Amazon is one of our state’s most successful creators of wealth and jobs. We wish Amazon and its people well, but we cannot support the company’s campaign to dodge the payment of state sales tax all across America….
[Amazon's tax-dodging] would be a slick strategy for the 1990s or maybe even today for a company nobody ever heard of. But Amazon, which ambitiously named itself for the biggest river on Earth, has become what its name implies. It is the Internet’s widest and deepest source of products, which makes it too big to be excused from its obligations.
Amazon is going to lose this fight. It knows this. It is trying to drag its feet as long as it can because it is profitable to do so.
A U.S. District Court judge in Denver issued an injunction at the end of January against House Bill 10-1193, which would have required online retailers that do not collect Colorado sales taxes to notify customers that they’re obligated to pay them to the state.
When the law passed last year, Amazon ended its affiliate programs in Colorado as part of a nationwide legal strategy. Cutting physical ties to states has so far worked to thin arguments that Amazon should charge customers who live in those states sales taxes, just as all other retailers conducting business have to do. Taxes pay for roads and fire and police protection and other services necessary to do business.
Amazon recently lost a similar case in North Carolina, where it will now have to pay sales taxes. It also recently shuttered a major distribution center located in Texas rather than pay taxes there. Texas, which collects no income tax from its citizens, said Amazon owed $269 million in unpaid sales taxes.
The most controversial parts of the Colorado law that would have required Amazon to pay sales tax involved privacy issues. The law required online retailers to send customers annual reports detailing their purchases and to also report to the state Department of Revenue the names, addresses and total amount in purchases made by Colorado customers. Under the law, the state would not have received itemized lists of purchases made by individual Coloradans.
Colorado lawmakers are struggling to cut more than a billion dollars from the state budget. Governor John Hickenlooper Tuesday asked lawmakers to cut $375 million from the elementary school budget and $36 million from the budget for higher education.
“Why did John Dillinger rob banks?” Hickenlooper asked members of the press after he announced his plan to cut the K-12 school budget. “Because that is where the money is,” he said. “If you don’t have the money, you don’t have the money. What are we going to do, wipe out higher education?”