Shopping center owners will soon have one perceived roadblock behind them. Amazon.com is going to start collecting sales tax in some major states, putting the most successful Internet retailer on the same playing field as any brick and mortar store.
By law, Amazon was only required to collect sales tax from the five states where it has a physical presence, such as its headquarters in Washington state and areas where it has distribution centers. But revenue-hungry states have been putting pressure on the company for years, and with its enormous growth, it's harder for Amazon to avoid putting warehouses in certain locales just to avoid charging customers sales tax.
It will start collecting sales tax on purchases by Texas customers this week, followed by California and Pennsylvania in two months. In a year and a half it will collect sales tax in 13 states.
For shopping center owners, the perceived advantage is huge. Some think that Amazon and other retailers have an extremely unfair advantage over shops that are required to charge customers sales tax. We've heard more than one person say: "Why would I go into a store when I can buy something at Amazon and not have to pay sales tax?"
The issue has especially been a hot button issue for the International Council of Shopping Centers. The organization and its members have been lobbying Washington for years to have Internet retailers taxed in states where purchases are made.
But will this measure make that much of a difference? We doubt Amazon's sales are going to take too much of a hit. The company is now so ingrained in the consumer's psyche that we're guessing very little thought takes place before deciding to make a purchase from it. Some industry observers also say that the ability to increase its number of distribution centers will also help Amazon to better serve its customers.
Either way, it is a good thing. You can make all the arguments you want about whether or not people should be charged sales tax in the first place or that we should have a universal sales-tax rate in this country, but as long as we are living in this current system, it doesn't make sense that some companies are given preferential treatment just because their customers aren't leaving their homes to shop.
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