Amazon won't go out of its way to collect sales taxes

Amazon is no fan of collecting state sales taxes, and it's ready to play hardball once again in its attempt to avoid the levy.

An e-mail sent from the company to all of its Illinois affiliates warns that, should Governor Pat Quinn (D-IL) sign a just-passed tax bill, Amazon is cutting off every affiliate in Illinois. Illinois wants Amazon to collect 6.25 percent sales tax and send it back to the state. Under current law, only companies with a physical presence in the state have to do this, but the new bill declares that even having affiliates in Illinois counts as "presence." The change shouldn't affect tax revenue in Illinois, since residents who purchase from Amazon and other online, out-of-state vendors are required to pay a "use tax" each year that replaces the lost "sales tax." The bill simply shifts collection from the individual Illinois buyer to companies like Amazon. But of course that's not what happens. Few Illinois residents actually pay the tax, and the state has no way of knowing how much any particular person should owe. In practice, then, buying from Amazon comes at a discount over buying from a local store.