New York Times: As Amazon Steps Up Tax Collections, Some Cities Are Left Out

When Amazon agreed last year to begin collecting sales tax in New Mexico, state officials celebrated what they said could be tens of millions of dollars in annual tax revenue.

But they aren’t cheering in Albuquerque City Hall. A year after that announcement, New Mexico’s largest city hasn’t seen a dime from Amazon. That’s because the online shopping giant’s deal applied only to the 5.125 percent statewide tax, not to the 2.375 percent tax tacked on by the City of Albuquerque.

“The loser in that arrangement is cities,” Mayor Tim Keller said. “Cities are really being left to themselves.”

Thanks in part to a series of deals with state governments in recent years, Amazon is collecting sales tax in every state that has one. But those deals don’t always extend to taxes assessed by local governments. The company still isn’t collecting sales taxes in dozens of cities, including Philadelphia, Pittsburgh and Cedar Rapids, Iowa, according to a new report from the Institute on Taxation and Economic Policy, a left-leaning think tank.

Carl Davis, the report’s author, said local governments were missing out on millions in tax revenue when other income streams are also under strain. And local retailers, many already struggling to compete with online retailers, are effectively forced to charge more for their products than online sellers that aren’t required to collect local taxes. Read more

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