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Amazon Desperately Outruns Online Sales Taxes By State-Hopping

Sites include . Published on July 11th, 2011. Written by Anthony West.

Amazon.com is a big company, and it’s a good thing the United States is a pretty big country. The number of states looking to plug budget deficits by implementing online sales taxes, has more than doubled in the past couple of years. This has forced Amazon to take a more strategic approach to the building of distribution outlets. Amazon Sales Tax

Reports coming out of Phoenix, Arizona, is that Amazon is set to open a 1.2-million-square-foot distribution facility. This new facility would bring the total to four, the number of distribution centres run by Amazon in the Phoenix area. Phoenix joins Indiana as one of the havens available to companies like Amazon looking to avoid paying online sales taxes. At this rate, entire states will become nothing but glorified warehouses.

One wonders though, how much longer Amazon will be able to dodge the online sales tax bullet—It’s no secret after all, that the majority of states are contemplating implementing it. This state-hopping too, is bound to catch the eyes of tax legislators. If Amazon isn’t careful, it could well become a magnet for legislators. As the worlds largest online retailer, Amazon potentially is a sizeable income boost for the majority of tax coffers.

Many have argued that Amazon is just being “tight”. But where they see intransigence, Amazon sees potential losses and job cuts. The truth, as they say, is somewhere in between. One thing is certainly evident, Amazon finds it cheaper to build a new warehouse than paying an online sales tax. Let’s just hope legislators don’t drive companies like Amazon completely offshore.

Watch the video below to see details of this corporate game of cat and mouse.

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  1. The Marketplace Fairness Act: Leveling the Playing Field for Brick-and-Mortar Retailers | JETLaw: Vanderbilt Journal of Entertainment & Technology Law

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