A growing number of states, facing revenue shortfalls, are looking at forcing Amazon.com and other e-commerce companies to collect sales tax on web purchases, a trend that could have a major impact on Amazon’s business.

Lawmakers in California, Hawaii, Connecticut, Minnesota and Tennessee have introduced bills that are similar to a law passed in New York state last year.

That New York law — which Amazon has challenged in court, so far unsuccessfully — establishes that Amazon has a physical presence in New York through its relationship to locally based affiliate websites that link to Amazon products. As a retailer with an established physical presence in New York, Amazon is thus required to collect state sales tax on items that are shipped to New York residents.

It’s not clear yet if any of the copycat tax bills in other states will become law. But for Amazon, the proliferation of such legislative efforts is potentially problematic. If Amazon is forced to collect sales tax in more states, that could be a turn-off to cost-conscious shoppers not accustomed to paying tax on online orders.

“It goes right to the heart of their business model,” said Maureen Riehl, a lobbyist for the Washington, D.C.-based National Retail Federation.

“If this starts to take root in big states — in California, Florida or others — it’s pretty dramatic,” Riehl said. “You start to think, ‘Is it easier for me to go down to the Sears store or buy it online?’”

Many states require sales taxes on online sales, but residents often don’t report them. Having Amazon and other companies collect that tax on web purchases could boost that revenue for states.

Asked for Amazon’s response to the various state legislative efforts, company spokeswoman Patricia Smith didn’t comment. But she said Amazon is appealing a New York state judge’s January decision to dismiss its lawsuit challenging the New York law.

Another online retailer, Overstock.com, filed a legal challenge to the New York law. That lawsuit was also dismissed, and Overstock.com is appealing, said company General Counsel Mark Griffin.

Daniel Schibley, a Chicago-based analyst who tracks state and local tax issues, said as states grapple with budget crises, more are likely to take a serious look at the New York model of classifying Amazon as a physical — and therefore taxable — presence in the state through its affiliate websites.

“In the current economic climate, it has a pretty good chance in some of these states, and we’re likely to see more states looking at this,” said Schibley, who works for CCH, a tax and business law information service.

Amazon has shown support for the Streamlined Sales Tax Project, an effort dating back to 2000 to simplify and coordinate sales tax laws across the states, with an eye toward sparking federal legislation (the project has 22 member states, including Washington).
Today, Amazon collects sales tax on items shipped to a handful of states: Kansas, Kentucky, North Dakota, New York, and Washington.

Schibley said Amazon is likely holding out for federal legislation that creates a uniform online sales tax code and applies equally to all e-commerce companies regardless of whether they use affiliate websites. Amazon, he said, does not want to be at a competitive disadvantage to rivals such as online auction site eBay when it comes to state sales taxes.