Unfortunately, almost all of the states appear to be enabling Amazon’s tax collection avoidance strategy, despite the fact that it is driving their own local retail businesses out of business, and also depriving their citizens of much needed tax revenue.

Mayors, governors, controllers, local political bureaucrat and activists in some of our bigger states and cities have spayed and neutered themselves because they want the carrot to stay dangling of a new local Amazon HQ,.

Amazon might cease operations in their state

Nobody wants that headline

Regardless of the excuse, under every state’s law, Amazon is the one responsible for collecting the tax, and states could be collecting, not 40% or 50%, but 100% of the tax they are entitled to from Amazon’s sales.

Telling Amazon to collect the tax is about as straightforward under state law as asking Walmart, Target or Best Buy to collect the tax on the sales in their stores..

South Carolina, is the only state suing Amazon to collect the tax, which led to the famous Trump Tweet. They are the only state willing to enforce their law.

States are persecuting hundreds of thousands of mom and pop businesses

By choosing not to collect the tax from Amazon, states have decided to, instead, go after the 3p sellers, most of which are small businesses, and all of whom are Amazon’s suppliers, and not the retailers responsible for collecting the tax.

The states believe each of these small businesses should file as many tax returns as Target. This compliance burden alone would drive most domestic sellers out of business.

Mom and pop sellers

Small retail merchants are being audited by states, especially Washington and California.

At the same time, an organization called the Multistate Tax Commission is offering an “Amnesty” to these sellers, on behalf of 25 states.

Essentially, these “Amnesty” states are falsely accusing sellers of civil tax evasion, but offering them a chance to come clean if they comply. The message the sellers are getting is, if you don’t comply we’ll hunt you down.

It’s a fairly reasonable interpretation for the sellers, when you have Massachusetts suing Amazon for individual seller lists.

Small sellers can’t afford a legal defense and  multistate tax experts

The retailers will lose, as they have been for many years, which is what has caused the uptick in so-called “Zombie Malls” in every state.

While individual seller enforcement will result in very few sellers actually complying, there is a growing threat of China shipping direct, which makes it impossible for the states to enforce the tax law.

Allowing Amazon to forgo its tax collection responsibility and depriving citizens of sales tax revenue should not be a decision that states should be allowed to make at their discretion

ht + snatch to Ecommerce Chris