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The State of Arizona is taking the first crack at trying to collect sales tax from amazon.com–the biggest online discount retailer. According to a filing with the SEC, Arizona calculated that Amazon owes the state & various cities $53 Million in uncollected taxes from March 1st, 2006 through December 31st 2010.
Amazon plans to defend itself from the charges: “We believe that the assessment is without merit and intend to vigorously defend ourselves in this matter…Depending on the amount and the timing, an unfavorable resolution of this matter could materially affect our business, results of operations, financial position, or cash flows.”
Other states including Illinois, Arkansas, Connecticut, North Carolina, New York, Rhode Island, South Carolina and Texas are all fighting for Amazon to collect sales tax. With severely cash strapped states and the public nature the national debt conversation, it appears it is only a matter of time before online retailers like Amazon are forced to collect sales tax. The outcome of the Arizona suit & others that are sure to follow are of little consequence. Amazon will simply have to collect sales tax or not. However, collecting sales tax equates to higher prices for users of amazon.com. Its usually the consumer that ultimately suffers.
Source: Direct Marketing News