States Pressure E-Tailers to Collect Sales Tax

The economic slump is helping rekindle a debate on whether online retailers should have to collect state sales taxes, a question that has pitted the new economy against the old.

A half dozen cash-strapped states are contemplating new laws that would require e-commerce sites to charge shoppers local sales tax on purchases. Proponents of sales tax for online merchants, such as the American Booksellers Association, say it is a matter of fairness to tax online purchases the same as bricks-and-mortar ones. "It isn't the role of government to pick favorites between one group of retailers as opposed to another," said the organization's chief executive, Oren Teicher. Mary Osako, a spokeswoman for Amazon.com Inc., the largest online retailer by revenue, said state-by-state laws are creating a "very complex sales tax regime," and that the company would only support a "simplified system, fairly applied to all business models." Amazon is in favor a national streamlined sale-tax effort that would mandate sales tax collection by out-of-state retailers in 23 states that have voluntarily signed on to the program. "We aren't opposed to collecting sales tax within a constitutionally permissible system applied even-handedly," Osako said.