US states losing $7 bln a yr in sales taxes-report
NEW YORK, Nov 16 (Reuters) - U.S. states and local governments lose more than $7 billion a year in potential sales tax from online retailers but could recoup some of that by adopting measures similar to one passed in New York, a report said on Monday.
Amazon.com Inc (AMZN.O) has led the way in lobbying for online retailers to remain exempt from charging sales tax, arguing that they are protected by a 1992 Supreme Court decision, according to the report by the nonpartisan Center on Budget and Policy Priorities.
Amazon has taken the lead in opposing a 2008 New York law that deems a retailer to have a physical presence in the state if it has affiliate websites in the state selling on its behalf.
Efforts to upend the law, dubbed the "Amazon law," because the retailer is the biggest company to be affected by it, have so far been unsuccessful.
Until federal legislation is enacted, other states should adopt measures like New York, said the Washington, D.C.-based research group.
Amazon argues that collecting sales tax in every state would be burdensome. But the company already collects sales taxes in nearly every state for the other companies that sell merchandise on its website, the report said.
Amazon further says that collecting taxes in states where it does not have a physical presence would be unfair because it does not directly benefit from their public services.
But the company collects taxes in just four of the 17 states where it does have a presence, the report said.
"It is disingenuous for Amazon to argue that it should not have to help support public services in states in which it has no physical presence when the company fails to support public services in most of the states in which it has a physical presence," said the report.
Amazon officials were not immediately available for comment.
Amazon has argued that its opposition to collecting sales tax is not driven by the wish to enjoy a price advantage over competitors, said the report.
But, the center said, since the company was first launched top management have repeatedly stated that not charging sales tax gives it a key competitive edge. (Reporting by Tom Ryan; Editing by Padraic Cassidy)
