AfterDawn: Glossary

Amazon Tax

The term Amazon Tax is used to describe sales tax proposals and laws in the United States that target revenue made by online retailers. has been the most vocal critic of some state legislation aimed at out-of-state online firms, resulting in the label "Amazon Tax".

In Amazon's case, it has affiliates sending sales to its giant website in states where it does not have a physical presence (or other limiting factors for revenue collection). Officials in many states in the United States believe Amazon should have to collect sales taxes when the affiliates are opering within the state.

Amazon opposes efforts to enforce it to collect such taxes. In 2010, Amazon terminated contracts with affiliates in Arkansas after the state passed such a tax collection requirement. A similar result has been experienced by Amazon affiliates in Colorado, Connecticut and other states.

The wealthiest state in the union, California, is also seeking to introduce a web sales tax that would force Amazon to collect sales taxes. Amazon has threatened to terminate contacts with California affiliates too.

The e-commerce giant describes the California bill as unconstitutional and counterproductive, and points out that it is being supported by brick and mortar retailers and other possible competitors to its business.


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