Files sales tax bill and the Amazon business model | Arkansas Blog

Friday, February 3, 2017

Files sales tax bill and the Amazon business model

Posted By on Fri, Feb 3, 2017 at 10:58 AM

Good report yesterday from Ibby Caputo of the Arkansas Nonprofit News Network on Sen. Jake Files' bill requiring out-of-state sellers who do a certain amount of business in Arkansas to collect sales and use tax.

The bill is being followed with interest by Wall Street because of sales taxes of this kind could have a significant impact on Amazon's bottom line. Happened upon this headline Nasdaq's website: "Is Amazon Threatened by the Proposed Tax Bill in Arkansas?" Their take:

AMZN might have to drop one of its competitive strategies against brick-and-mortar stores in Arkansas if a proposal advanced by an Arkansas Senate panel on Wednesday is accepted. ... Amazon has been taking advantage of a 1992 Supreme Court ruling that bars states from forcing out-of-state sellers lacking a physical presence to collect tax. Amazon even terminated contracts with its Arkansas-based affiliates back in Jul 2011 to avoid paying sales taxes from this state. ...The court ruling dates back to the pre-online shopping era. We believe that it lacks significance today when companies can sell at a place without having a physical presence.

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