Trying to Comprehend the Amazon Tax
Being as circumspect as I’m able, I can’t see the Amazon tax as anything other than myopic protectionism on the part of RI policy makers. Basically, the law states that a company has “a physical presence” in the state if it has affiliate agreements with local businesses, requiring them to collect Rhode Island sales taxes:
[RI House Finance Committee Chairman and General Treasurer Candidate Steven] Costantino said he wants to keep the law in place as a matter of equity. “Rhode Island businesses who are on Main Street need a fair playing field,” he said.
Gary S. Sasse, director of the state Department of Revenue, put it this way: When buying a camera from a store in Rhode Island, a consumer must pay a sales tax. When buying online, a consumer may or may not pay sales tax.
“It’s a violation of the basic concept of fairness in tax policy, to tax one seller and not the other,” Sasse said. Repealing the Amazon law would be a mistake, he said.
The vision evident in that view is as narrow as a snake’s scale. First of all, local businesses can compete on the lack of shipping costs and immediate gratification. Second of all, the Internet enables local businesses to create online stores and pursue customers worldwide. Large, national companies will have a huge advantage over small, Rhode Island companies once all states follow Rhode Island’s lead.
The most mind-boggling thing is that consumers can still get the products without taxation, provided absolutely nobody locally benefits from the purchase. At the very least, one can say that Rhode Island is in no position, economically, to be in the vanguard of this government backlash against Internet retailers.