“If this was five years ago, the tweet would be making a very compelling point,” said Carl Davis, the research director of the left-leaning Institute on Taxation and Economic Policy. Historically, “there is no doubt that Amazon used its ability to not collect sales tax to gain a competitive advantage.”
The Supreme Court ruled in 1992 that a state can require retailers to collect a sales tax only if they have a physical presence in that state, so an out-of-state e-commerce company with no store or distribution center in that state has no obligation to do so. Several states have enacted broad laws, colloquially called “Amazon laws,” that attempt to counteract this disparity between e-commerce and brick-and-mortar businesses.
As recently as 2012, Amazon was collecting a sales tax in only five states, according Mr. Davis. He also noted that Amazon “cut ties with in-state businesses to avoid collecting sales tax” in several states between 2009 and 2014. Read more