Sales Tax, Amazon, and Dinner Parties

If you’re reading this, you are likely in the sales tax industry and will appreciate this post. You may not get any new pearls of wisdom but I’m sure it’s a topic you can relate to. Recently, I was at a neighbor’s house for a dinner party and the conversation turned toward “so, what do you do”. After describing my business, I got the “oh, so I guess you’re pretty busy in April”. I’m to a spot where I usually go along with it and don’t bother to describe what I really do.

I’m sure most people don’t realize that sales tax accounts for 30% to 40% of most states’ revenue – more than either personal income or corporate income tax. They probably don’t realize that our work happens every month, not just once a year (not to discount our friends in the income tax industry). The only time they pay attention to sales tax is when there’s an increase, or a tax holiday (I’ve seen enough of that lately), or someone is convicted due to some type of sales tax fraud.

Once in awhile someone will be a bit more knowledgeable and comment about how they can’t believe that Amazon is getting away with not paying their share of taxes. Wait a minute. Not sure where Amazon got such a bad rap in all of this. I’d probably do what they’re doing if I was running their sales tax department. They are a business thriving in a capitalist society. Shouldn’t they be celebrated? Yet they are demonized for not collecting sales tax (even though they have no legal responsibility to do so). By not collecting sales tax, they may have an advantage over big box retailers. But use it as a reason to overturn Quill and cause the internet retailers to collect sales tax (not that I’m necessarily a fan of that), not as a reason to cast dispersion on Amazon.

Nobody can predict what’s going to happen on this front but I don’t see the pair of companion bills introduced earlier this month in both the US Senate and US House of Representatives getting through this year. Every two to three years, this issue picks up steam. Next year, as an election year, will probably not see this issue tackled. Let’s see what happens in 2013.

Until then, enjoy your dinner parties and chuckle to yourself when you hear “so I guess you’re pretty busy in April”.