Main Street group fires back at Amazon

A small business lobbying group on Thursday (Aug. 4) used a Wall Street Journal report to fire back at Amazon for withdrawing affiliates and operations from states that require Internet retailers to abide by the same tax collection laws as bricks-and-mortar businesses.

SB 738, carried in the Arkansas Senate by Sen. Jake Files, R-Fort Smith, was designed to close a loophole in tax law that puts Arkansas small businesses — those that collect sales taxes locally — at a competitive disadvantage.

With the bill now law, Arkansas joins other states seeking to level the playing field between local retailers and large online retailers. Discount online retail giants like Amazon.com or Overstock.com don't currently collect sales tax on items sold. They contend that customers are obligated to make the payments voluntarily.

“This bill doesn’t create any new taxes," Files said when he filed the bill. "It ensures that sales taxes already due are collected in a more efficient way. This will give consumers the peace of mind that they aren’t going to be liable for paying sales taxes after making online purchases, as they are now."

In early April, Overstock.com pulled out of Arkansas, saying the law is unconstitutional because it forces out-of-state retailers to collect sales tax merely for using in-state ad services. The company canceled all ad contracts in Arkansas and will end relationships with affiliate sellers in the state. Overstock has taken similar actions in Illinois, New York, North Carolina and Rhode Island.

Amazon also pulled out of Arkansas.

Files and other supporters of the law have taken heat from Tea Party activists and some Republicans who say the law was nothing more than a veiled tax hike. They also say the Arkansas law and similar laws in other states represent state governments trying to greedily extend their tax code to the Internet.

The “Stand With Main Street” group now say the Wall Street Journal Report shows that Amazon and other online retailers were really focused on finding ways to skip paying taxes. The group provided two excerpts from the WSJ story.
• “In the 2000s, Amazon documented the restrictions in a U.S. map that shaded each      state red, yellow or green and was given to new employees, said three people who saw  it. It couldn't be determined precisely which staffers received it and to what extent the practice is followed today.”

• “Other employees received a spreadsheet with two columns: ‘bad states’ and ‘safe states,’ said a person who saw the document within the past year. One copy of the spreadsheet, reviewed by The Wall Street Journal, listed nine ‘safe states,’ including the four states where Amazon declares retail operations. The spreadsheet listed 19 "bad" states, including Arkansas, Connecticut, Illinois and Texas, which have sought to expand taxation of online sales.”

Files said Thursday the WSJ report shows the extent to which online companies will to go to avoid paying taxes.

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“It bothers me that companies such as Amazon would make business decisions, not on factors that they can control like labor availability, environment, and quality and cost of living, but on their ability to avoid sales tax collections,” Files said. “On the contrary, I am thankful that we have many small businesses, and large ones for that matter, who operate and comply with the law every single day and work to make Arkansas a better place, provide jobs, and make a positive contribution to our communities and economy.”

Robert Coon, spokesman for the Little Rock-based Alliance for Main Street Fairness in Arkansas, says what is happening in Arkansas points to the need for comprehensive federal reform of sales tax laws.
 
“Sales tax avoidance seems to be priority number one for this Internet company and anyone who jeopardizes their ability to skirt the law gets thrown by the wayside, including our in-state affiliates. It is clear that now is the time for Congress to address the issue and give states the authority they need to close this tax loophole once and for all,” Coon said in a statement.

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Who's a tool for Wal-mart?

As indicated in this previous TCW post (http://www.thecitywire.com/?q=node/14956) The internet sales tax legislation was "quietly" pushed through by WALMART (not exactly a small business). This was a move against their biggest competitors, the large internet outfits at the cost of consumers. __It's hard to stomach all the mushy BS about the immorality of Amazon avoiding taxes while knowing it was actually WALMART behind the "Main Street" scheme. Especially with Walmart being even more notorious for seeking out tax payer subsidies and sweetheart tax deals which they used to decimate any small business in their path.__Let's be real, the small business interest in this story is being used as a human shield in a battle between giants throwing around their politcal prowess. __In the 1940's corporations paid $1.50 in taxes for every dollar paid by indivuals. Today corporations pay only $.25 for every dollar paid by individuals. This legislation is about collecting more tax from individuals while giving a leg-up to corporate crony tax avoiders.____

Good Catch "Anonymous"

I had missed the Big-Business connection on this Main Street group. Wal-Mart should be ashamed using the phrase "Main Street". In my home town in S.E. Oklahoma I personally watched as two of my family's retail businesses were drug to their grave by Wal-Mart's manipulation of local government and zoning laws to destroy Main Street. Even here in Fort Smith you would have to be blind not to see it. Every time they have moved they relocate farther from downtown. Think about that, it is true. This forces the city to extend services and bus lines to what ever swamp they drain next. They champion lower prices for the poor by getting as far away from them as possible every chance they get. There is no hope for "Main Street" as our feckless public servants, to overawed by the retail giant, fail to engage in critical thinking and say "What is the downside to them moving many miles from downtown into a swamp?"
I had missed the Big-Business connection on this Main Street group. Wal-Mart should be ashamed using the phrase "Main Street". In my home town in S.E. Oklahoma I personally watched as two of my family's retail businesses were drug to their grave by Wal-Mart's manipulation of local government and zoning laws to destroy Main Street. Even here in Fort Smith you would have to be blind not to see it. Every time they have moved they relocate farther from downtown. Think about that, it is true. This forces the city to extend services and bus lines to what ever swamp they drain next. They champion lower prices for the poor by getting as far away from them as ...>> Read the entire comment.

interesting tool

if corporations create jobs for people and those working people pay income taxes on their salaries and their employer pays the payroll tax on their employees that amounts to about 14.3%, this is in addition to what the employee pays in taxes, and then the corporation pays dividends to its stock holders with the dividends being taxable income to the shareholder that they are required to pay income taxes on. please explain how corporations are not taxed and why they should pay more???? interesting????? if you overtax the job creators---then less jobs are created---less income is produced----government ends up with less tax money! can you please explain your position on more taxes for corporations. it seems that no taxes on corporations would mean more jobs created and result in more taxes paid to government!
if corporations create jobs for people and those working people pay income taxes on their salaries and their employer pays the payroll tax on their employees that amounts to about 14.3%, this is in addition to what the employee pays in taxes, and then the corporation pays dividends to its stock holders with the dividends being taxable income to the shareholder that they are required to pay income taxes on. please explain how corporations are not taxed and why they should pay more???? interesting????? if you overtax the job creators---then less jobs are created---less income is produced----government ends up with less tax money! can you please explain your ...>> Read the entire comment.

not my idea of happy times

happy times, you're "don't tax corporations" logic almost makes sense if you completely ignore reality. The end result of your equation is slapping us coldly in the face. The working class has gone from the ability to buy a home on a single income from savings to a lifetime of debt, cheap synthetic food products and products that break before you use them. Both our government and our working class are saturated with debt. Corporate profits rise while everything else crumbles. The multi-national corporations wield more money and influence than any nation. But hey they'll give us jobs that pay less and less so we can continue to make payments on our debt.

your idea of what

where does the working class get their paychecks??? is it the government that ends up with about 70% of the wage earners income. add all the taxes that the average person pays--- corporations and employers pay wages and goverment consumes the fruit of the labor by overtaxing. has government ever created a job?? oh yes by starting a war! how right you are! the average working person gives 6 to 8 months of their labor to their government in the form of one tax or another. would you want more??? it is obvious that you don't understand what creates a robust economy---it sure ain't government----debt would not be there if it wasn't for all the unneccessary wars and all the spenders in washington----who are you kidding anon????
where does the working class get their paychecks??? is it the government that ends up with about 70% of the wage earners income. add all the taxes that the average person pays--- corporations and employers pay wages and goverment consumes the fruit of the labor by overtaxing. has government ever created a job?? oh yes by starting a war! how right you are! the average working person gives 6 to 8 months of their labor to their government in the form of one tax or another. would you want more??? it is obvious that you don't understand what creates a robust economy---it sure ain't government----debt would not be there if it wasn't for all the unneccessary wars and ...>> Read the entire comment.

Could Jake Files Be A RINO Republican?

Could Jake Files be a RINO, “Republican In Name Only”? After all he did introduce SB738 into law this past Arkansas General Assembly. This law allows a state agency to utilize the private sector to collect taxes for the state. I feel this law made Arkansas just a little less desirable for out of state companies to relocate to Arkansas. Something we really didn’t need. Jake can say it was all about leveling the playing field for the brick and mortar companies, but it wasn’t. This law hurts the package delivery companies, such as United Parcel and FedEx, who delivered those packages for the internet companies. The only one it really helped was whoever Jake was working for and increasing the size of our state government and the revenue department. SB180 is another example that Jake Files could be a RINO republican. SB180 was introduced by Republican Senator Johnny Key out of Mountain Home. SB180 would have allowed the voters to vote on any proposed tax increase by any A&P across our great state. But because of Jake Files, this bill was killed in committee and therefore never making it to the Senate floor. We here in Fort Smith can relate to this bill. If this bill had been in existence the past February, Directors Phil Merry, Pam Weber, Andre Good and Steve Tyler would not have been able to force the proposed 1% Food Tax unto the citizens, but could only allow us to vote on it. Think of the money that vote costs us. It’s too bad that Amazon and Overstock.com pulled out of our state because of Jakes bill, SB738. But worse, is politicians interfering with private commerce. At a time when United Parcel, FedEx and other package delivery companies could use the business and the job creation, it would have been preferable to have those type jobs in the private sector than to continually expand government jobs that raises costs for everyone. Jake Files ran as a Republican, endorsed as a Republican but doesn’t vote like a Republican. We all have heard the saying,“ if it looks like a duck, walks like a duck, quacks like a duck, doesn’t matter how it’s sold, it’s still a duck”. At this particular time in history, we can’t continue to elect people into office just because of party affiliation. Neither do we need politicians in office that will vote to literally take our right to vote away from us as SB180 did, nor do we need politicians in office that want to expand the size of government at the expense of the private sector as SB738 does.
Could Jake Files be a RINO, “Republican In Name Only”? After all he did introduce SB738 into law this past Arkansas General Assembly. This law allows a state agency to utilize the private sector to collect taxes for the state. I feel this law made Arkansas just a little less desirable for out of state companies to relocate to Arkansas. Something we really didn’t need. Jake can say it was all about leveling the playing field for the brick and mortar companies, but it wasn’t. This law hurts the package delivery companies, such as United Parcel and FedEx, who delivered those packages for the internet companies. The only one it really helped was whoever ...>> Read the entire comment.

Oh my! I agree with Jack Swink!

For once, Jack and I see eye to eye on a subject! I've personally emailed Jake Files several times when he was pushing this bill, and let him know how disappointed I was. He claimed he had "quite a few constituents who have been interested in this fairness bill for quite some time. They have been visiting with me about it since last summer." Makes me wonder who Jake thinks his constituents are! I didn't realize he solely represented Wal-Mart, and not the people who voted him into office...

Constituents

I personally talked to Jake about this bill as well and he told me that companies (local) like Bedford's Camera & Video first approached him about this and several other brick and mortar stores expressed real interest. If you don't agree with someone 100% of the time does that make him a RINO? Surely you can look at Jake's record across the board rather than just one vote. You wonder why good people don't want to run for public office...

Jake Files didn't represent the constituents back Home

Anon, I think I had two votes in my comments. One affecting our right to vote and the other using government to collect sales tax for our state government and therefore increasing the size of government at the expense of the private sector. We all have to decide what is important to us and just so happens the right to vote on taxation is huge for me as well as a vibrant private sector and Jake failed his constituents on both these issues.

Sales taxes

In the first place, if Arkansas sales taxes weren't among the highest, if not the highest in the country, people wouldn't be so anxious to avoid them. If our sales taxes were 5 or 6%, Amazon wouldn't save them as much. But Files' bill probably wasn't meant to help the Main Street businesses, anyway... They can't match Amazon's low, low prices. Files sounds good when he claims to be the champion of the little guy, but we all know who's hurt the most by Amazon's failure to collect sales taxes---Wal-Mart. Wal-Mart is behind the effort to force online retailers to collect sales taxes, because Wal-Mart, which has bricks and mortar presences everywhere, can't get away with not collecting them.

Jack get your head in the game.

Jack get your head in the game. Democrats and Republicans may run different plays but they have the same goal. The defense selectively regulates protecting corporate interests while using taxes to subsidize them. Meanwhile, the offense is clearing the corporate path of obligations to the public with tax cuts and big business deregulation. If you'll check the score it's pretty clear to see who's winning (hint: it's not we the people). So what if Files ran a trick play? It's a score for the team and in this case it just so happens to be one of your favorites. http://www.jimlillig.com/internet-marketing/why-walmart-is-fueling-the-attack-on-online-affiliates/

yes jack- get your head

don't you understand that corporations create jobs and wage earners pay taxes and employers pay payroll taxes to support government. don't you understand that corporations pay dividends to their stockholders and the stockholders pay taxes on those dividends to help support their government. job creators are good! gee jack, you are trying to help government get out of its own way and some of those people don't like it! shame on you for trying to help your government---let not forget that some of these same people spit on vets returning from vietnam for doing their jobs. sad as it seems, it really happened! can you believe it?

OMG! Great Link Anonymous

Wow again. Bedford sould have read this before they jumped in. It would actually funny if it did not make me feel helpless against these giants. These are truely shark infested waters: http://www.jimlillig.com/internet-marketing/why-walmart-is-fueling-the-attack-on-online-affiliates/

Wal-Mart bashing is what piqued my interest

I am not a fan of Wal-Mart as you probably guessed. Do I want them taxed out of existence? No. Would I like them to stop manipulating city economies and government? You betcha! If we continue to tax corporations as citizens they will morally have a right and obligation to try to twist government to their favor. They are paying for a voice in out government affairs. Being taxed means you get representation. If we stop taxing corporations can we silence their voice? I would love that and it would be fair. I am not an accountant but from what I know being a corporation means they have to disperse the profits or reinvest them. The dispersed profits go to regular tax paying folks that bought shares so it is going to get taxes paid on it either way.
I am not a fan of Wal-Mart as you probably guessed. Do I want them taxed out of existence? No. Would I like them to stop manipulating city economies and government? You betcha! If we continue to tax corporations as citizens they will morally have a right and obligation to try to twist government to their favor. They are paying for a voice in out government affairs. Being taxed means you get representation. If we stop taxing corporations can we silence their voice? I would love that and it would be fair. I am not an accountant but from what I know being a corporation means they have to disperse the profits or reinvest them. The dispersed profits go to ...>> Read the entire comment.

corporations are essentially

corporations are essentially double taxed....up to a rate of 35%. They also pay state tax rates of up to 12%.Of course they have deductions like the rest of us do, sometimes only larger deductions. Generally corporations pay taxes on their income, then a shareholder pays taxes on the dividend income, as well as any capital gains tax from the sale of stock. Of course their are varations involved when the company is an LLC, Partnership, S corp etc...Corporations pay the bulk of taxes in the US. With around 50% of the walking around population paying $0 federal income tax. They are also great targets for politicans bc they cannot vote. Thus the corporations vote with lobbyists.....tho unliked lobbyists are there to make sure the corporate interests are as "fair" as possible.
corporations are essentially double taxed....up to a rate of 35%. They also pay state tax rates of up to 12%.Of course they have deductions like the rest of us do, sometimes only larger deductions. Generally corporations pay taxes on their income, then a shareholder pays taxes on the dividend income, as well as any capital gains tax from the sale of stock. Of course their are varations involved when the company is an LLC, Partnership, S corp etc...Corporations pay the bulk of taxes in the US. With around 50% of the walking around population paying $0 federal income tax. They are also great targets for politicans bc they cannot vote. Thus the corporations vote with ...>> Read the entire comment.

well said matt!!

isn't it amazing that some mis-informed people complain about corporations not paying enough taxes when it is the corporate tax that mostly supports america. over 50% of the people in america pay no income tax at all and then they complain about corporations that pay the bulk of all USA taxes. the one thing that I see that is missing from the discussion is that when you raise the tax on corporations, it actually raises the cost of goods purchased by the everyday comsumer at the retail level. it appears that our government has really done a job on the misinformed and uneducated people regarding taxes when you see people calling for increased taxes on corporations. its almost like the consumer complaining to the retailer that the price is too low and they would like to pay more for the item. it simply does not make any sense!!!!
isn't it amazing that some mis-informed people complain about corporations not paying enough taxes when it is the corporate tax that mostly supports america. over 50% of the people in america pay no income tax at all and then they complain about corporations that pay the bulk of all USA taxes. the one thing that I see that is missing from the discussion is that when you raise the tax on corporations, it actually raises the cost of goods purchased by the everyday comsumer at the retail level. it appears that our government has really done a job on the misinformed and uneducated people regarding taxes when you see people calling for increased taxes on corporations. ...>> Read the entire comment.

Wal-Mart and Taxes

Dev: As a Business owner,I have a couple question for readers after having read your post,readers should consider and answer these questions: Have you ever started a company that provides jobs? How many jobs do you provide and how big is your payroll? How do you propose to impose a tax on Wal-Mart that they don't consider as overhead and pass on to the consumer which raises the cost of goods to me and you? How do you tax Exxon oil and keep them from raising the pump price which cost me and you more to fill our cars? When a corporation decides to move offshore because taxes are lower, how do you prevent that? A lot of them are moving now, does that help us?? The Tabacco Corporations were big mean nasty people (according to the Government) who got sued and guess who paid for that? Smokes are now about $7.00 a pack for those who smoke. I suggest the Tabacco companies never lost a dime but, it was a huge tax windfall for the Government which the smokers are paying everyday. I am not suggesting that Corporations are Angels by any standards. However, it seems that people tend to decide that the so called big corporations are by their very nature evil and that is not true. I suggest that people should think about what will happen before they somehow decide that we should go after the small or large corporations for more and more tax money because in truth what is happening is we are raising our own "cost of living" by trying to get even or make them pay their so called fair share. The truth of the matter is "increased overhead equals price increases".The other truth is that large or small companies are not bound to stay in the United Staes and they are moving to Mexico and many other places everyday because it is becoming less and less desirable to operate in the United States..Whirlpool in Ft Smith, Arkansas is a good example as they are moving a lot "more" of their operations to Mexico and real people here are losing their jobs..How's that for fair? I would suggest that people do some research and follow the money and make themselve fully aware of just how difficult it is to operate a business and to even make a profit to begin with before they somehow decide that the Wal-Marts of the world are hording all the money and are evil folks. Just for the record, I do not work for Wal-Mart and I don't shop there.....however, I do own several small companies which are being taxed out of business....... Have a great day!!
Dev: As a Business owner,I have a couple question for readers after having read your post,readers should consider and answer these questions: Have you ever started a company that provides jobs? How many jobs do you provide and how big is your payroll? How do you propose to impose a tax on Wal-Mart that they don't consider as overhead and pass on to the consumer which raises the cost of goods to me and you? How do you tax Exxon oil and keep them from raising the pump price which cost me and you more to fill our cars? When a corporation decides to move offshore because taxes are lower, how do you prevent that? A lot of them are moving now, does that ...>> Read the entire comment.