To brick-and-mortar retailers, Amazon is the Galactic Empire of competitors. But the Alliance for Main Street Fairness wants to play the Rebel Alliance and is pushing back with a full-page ad in the Richmond Times-Dispatch and a campaign aimed at forcing Amazon to collect sales tax from Virginians.
According to Rob Shinn of Capital Results, a Richmond public relations and lobbying firm that represents the Alliance for Main Street Fairness, Amazon found a way to get around collecting sales tax by tinkering with their corporate structure. The retail giant doesn’t technically have a “physical presence” in Virginia, which would require them to collect sales tax, because their distribution centers run as a separate entity.
“This is clearly designed to skirt the intent of the [sales tax] law,” Shinn said.
Retailers argue that this gives Amazon a competitive advantage because retail stores have to collect sales tax and that makes items more expensive, even though users are supposed to include online shopping when they file their end-of-the-year taxes.
Amazon did not return a call seeking comment.
This isn’t a new issue for Amazon. Some states have successfully challenged this corporate structure. Most recently, Indiana announced a deal with the company that requires it to start paying sales tax in 2014.
Indiana estimated Amazon’s policies were costing the state about $20 million per year in tax revenue.