Broadening or Redefining the Base
A recent Op-Ed in the Los Angeles Times makes the claim that “Amazon Taxes” are just a broadening of the tax base:
A better approach would be to make the sales tax requirement broader. Not to require more or higher sales taxes, but to require any online seller that sells to Californians to add the appropriate tax instead of leaving it to the buyer to add it up and pay it separately.
Amazon taxes represent an attempt to do more than broaden the base but to fundamentally redefine that base. The standard determination of sales tax liability has been based around the physical presence determination. This understanding has been upheld by the Supreme Court through the 1992 decision in Quill Corp. v. North Dakota.
Taxes which redefine the base to include the taxation of non-voting out-of-state business create greater complexity, less neutrality and distort economic decision making. All this and they might violate the Constitution.
Was this page helpful to you?
Thank you!
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?
Contribute to the Tax FoundationLet us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?
Give Us Feedback