On Wednesday, Maryland legislators heard testimony on S.B. 824, a proposal to enact a so-called “Amazon taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. ” in the state. From what I’ve heard, the legislators on the Senate Budget & Taxation Committee were engaged on the subject and eager to learn about the issue.
Until very recently, “Amazon tax” proponents have had a field day, claiming that the laws raise revenue for the state, level the playing field, and have survived constitutional scrutiny. None of those claims bear out, as I outlined in testimony we sent for the hearing.
The U.S. Supreme Court has ruled that states cannot force out-of-state businesses to comply with a sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. system so complicated and burdensome that it disrupts interstate commerce. Maryland wants to do so, and the 3,800 affilate marketers in Maryland are taking notice.
As AccountingWeb sensibly put it this week:
[S]tates should seek to create reasonable and enforceable tax laws that do not create a compliance burden that is unfair or impractical.
I understand each state’s budget/fiscal problems are serious; therefore, they are looking for revenue everywhere.
Has anyone ever stopped to think . . . . would the states be attempting to pass and enforce Amazon tax laws if they were not experiencing budget problems?
See more on nexus and Amazon taxes here.
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