Change the law

Most people are not aware of how sales/use tax laws work.

If I go to Delaware (where there is no sales tax) and buy a computer, I don't pay any Delaware sales tax but I owe Ohio use tax since I am a resident of Ohio. That use tax is the equivalent of Ohio sales tax.

In addition, if I buy a computer from a Kentucky company via the internet, they are not required to collect Ohio sales tax unless they have "nexis" in Ohio (essentially a business presence of some kind).

As a result, companies like Amazon save people sales tax dollars provided their state has no Amazon warehouses or other business locations within the state.

To make sales tax matters even more ridiculous, states have determined that the tax be levied where service/product is delivered. So for a Cincinnati local landscaper who performs services in Hamilton, Clermont, Warren and Butler counties, they are required to collect sales tax for each of those counties.

If you have an internet company in Ohio, you'd be required to collect the sales tax for over 90 different taxing districts within the state, a logistical nightmare.

So for a company like Amazon, it behooves them to not deal with the over 8000 different taxing districts throughout the country.

Well, people like the Times don't like that............

BEFORE settling on Seattle as the home of Amazon.com, the founder, Jeff Bezos, considered placing the company on an Indian reservation near San Francisco. “This way, we could have access to talent without all the tax consequences,” he said in a 1996 interview with Fast Company.

The reservation couldn’t be used as a sales-tax haven, after all, Mr. Bezos said he learned, so he had to look elsewhere. Offering prices free of sales tax to customers in California, the most populous state, would be possible only if the company were placed elsewhere. “You have to charge sales tax to customers who live in any state where you have a business presence,” he said then.

Today, Amazon collects sales tax in only five states, which gives it a continuing advantage over companies who do collect them in all or most states. Competitors aren’t the only ones hurt by Amazon’s stance on sales taxes: it also means the loss of considerable revenue to states and localities that badly need it.

The thing that makes this so ridiculous is that all this could be averted if the states agreed on one simple principle; you collect the sales tax from where the sales originates. As a result, Amazon would be forced to at least charge the 8.5% Washington sales tax from customers.

But that doesn't work for states. Why? because it would create a natural advantage for states like Delaware who have no sales tax and we all know how governments love competition.

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