Trump Tweet Attack on Amazon Spurs Tax Policy Questions

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Che Odom

President Donald Trump took to Twitter to attack Amazon.com Inc. for “not paying internet taxes.”

In a June 28 tweet, the president said: “The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!” It's not clear what Trump was referring to with "internet taxes."

However, Amazon collects and remits sales taxes in all 45 states with a sales tax and the District of Columbia, according to the company’s website. As of April 1, the retail behemoth had agreed to collect in each state that imposes sales or use tax collection obligations.

The tweet raised questions over Trump’s potential message. Some have taken the tweet as an indication the president might support a move to force e-retail companies to pay sales tax, even in states in which they lack a physical presence.

The U.S. Supreme Court’s 1992 decision in Quill Corp. v. North Dakota prevents states from levying sales and use taxes on retailers that have no physical presence within their borders. That decision still stands, though an increasing number of states have passed legislation in recent years to challenge it. Three lawsuits intended for the U.S. high court are pending in South Dakota, Alabama, and Tennessee.

Amazon’s campaign to reach sales tax agreements with states in which it had no physical presence likely was done to “facilitate rapid and same-day delivery in more locations throughout the United States, and to do that, physical presence in many states through regional warehouses and the like would be required to make that happen,” Jamie Yesnowitz, state and local tax practice and National Tax Office leader for Grant Thornton LLP, told Bloomberg BNA.

The White House press office turned down requests to clarify Trump’s tweet. Amazon also didn’t respond with a comment.

Legislative Group ‘Excited’

Max Behlke, director of budget and tax at the National Conference of State Legislatures, told Bloomberg BNA in an email that brick-and-mortar retailers pay the taxes that support their communities. Increasingly, these retailers are “disappearing from Main Street USA as they are competing against remote sellers that aren’t following the same law and therefore have an unfair advantage.”

His organization is “excited” the president is interested in addressing the issue, he said.

“We look forward to working with him and his administration to fix this increasingly growing problem,” he said.

To contact the reporter on this story: Che Odom in Washington at COdom@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

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