Can anyone remember a time before Amazon? The company was founded in mid-90s Seattle which then delivered grunge, but is still here, having tracked us students from hometown holidays to our shipping out to college. Students love Amazon, where they buy fair-priced textbooks at the start of each semester. But yesterday the Virginia House of Delegates passed a bill 95-2 — even Amazon can’t normally give us such deals — which would make the company pay and collect sales tax in Virginia starting September 2013. Customers of Amazon should nevertheless find value in an Internet company which has willingly asked legislators to tighten industry loopholes, starting with itself.
Since the 1992 Supreme Court case Quill Corp. v. North Dakota, the rule has been that a company needs a “physical presence” in a state if it is to be required to collect and remit that state’s taxes. The notion of a sales tax being extracted from Amazon provides an overpass from this physical presence controversy because Amazon planned to construct two distribution centers in Virginia this winter, to help out the elves, presumably.
A 95-2 vote looks too good to be true; even Amazon was all in favor and no one seemed to oppose. Everyone, in fact, looks to profit; with the sales tax from holiday shopping, especially, the state gets revenue, Santa gets cookies and Amazon makes dough.
Starting this February, Amazon rolled out a handling fee as an option to third-party sellers who work through its site. For outside sellers in certain states — this fee takes 2.9 percent off the top for Amazon to process state taxes. This fee could discourage third-parties from continuing to distribute on Amazon, parties which had previously had the convenience of selling their wares online without considering taxes.
Not only in Virginia, but across state legislatures, Amazon has worked with policymakers to coordinate taxes. Amazon spokespeople have given vocal support and testified before U.S. Congress about the advantages of having an Internet sales tax. A cynic might say Amazon is taking steps toward legal legitimacy to make first impressions in congresses where it may return to lobby later. But Amazon wants such laws to be enacted not only for itself but for all companies online. This is not Amazon’s scheme to crowd out competition by having the same rules apply, but knowing, rather, like any frontier the Internet needs laws and it’s best to take part in shaping them.
In addition, students who will now pay taxes on textbooks may wonder why Amazon gave up a legal fight which was still undecided. Especially since Amazon has made what looks to some like the masochistic move of asking the government to tax them. But taxes, in their full-blown banality, are the engine driving our education and our protests. The take-home order from the Amazon case is not that taxes should be changed one way or the other, but simply that the ones in place ought to be applied equally; though Amazon had lobbied for years against closing tax loopholes, we as University students should learn from its conscientious retraction.