Amazon v. the States

[Commentary] It never made sense to exempt online retailers from collecting sales tax. It’s ridiculous now when so many states are in deep fiscal trouble.

Illinois estimates that it is losing more than $150 million a year in uncollected taxes; California is losing an estimated $300 million a year. That would cover more than half the planned cuts for the University of California system. It’s good news that states are using new legal tools to force Internet retailers to do what every other retailer must do. It is disappointing to see Amazon.com fight back. Collecting state taxes is not an unreasonable burden for online retailers. Amazon already collects taxes in five states, including New York, and it also collects taxes on behalf of physical retailers that sell through Amazon. The best outcome would be for Congress to pass legislation requiring all retailers, online and off, to collect sales taxes everywhere they are due. In the meantime, states should not give in to Amazon’s pressure tactics.