Sears chairman takes aim at Amazon over sales tax issue |
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Amazon.com has come under pressure from various state legislatures that want the online retail giant to collect sales tax -- just like brick-and-mortar retailers. Now the chairman of Sears, one of the nation's largest brick-and-mortar retailers, is weighing on the issue, saying states should level the playing field when it comes to Amazon.
Sears Chairman Edward Lampert made the argument in a letter to shareholders posted online today. Here's an excerpt:
Amazon’s domestic business has grown to $12.8 billion in revenues for the year just ended. If you were to apply a 6% sales tax to this revenue (reflecting a rough average of sales taxes across multiple jurisdictions), that would amount to almost $800 million in sales and use taxes owed to state and local governments that is likely not being paid.
He later writes:
If state and local governments are going to require retailers like Sears and Kmart to collect sales taxes and not retailers like Amazon.com, they should recognize that over time their sales tax base will erode significantly and that they place companies who have chosen to locate stores locally at a competitive disadvantage. This will lead to a loss of revenues, the closing of local businesses, the loss of tax revenue, and ultimately to the increase in other types of taxes to compensate for the lost jobs and revenues.
Amazon successfully fought off a wave of state bills last year that tried to make the company to collect sales tax based on its ties to local marketing affiliates (the idea being that affiliates give Amazon a physical "nexus" in those states). Now lawmakers in California and other cash-strapped states are looking at such legislation again.
Sears and Wal-Mart have been boosting their ecommerce efforts in recent months and competing more aggressively with Amazon online.
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