RICHMOND-Amazon began collecting sales tax from buyers residing in Virginia—and Georgia for that matter—starting Sept 2. It follows a slew of other states in which Amazon has agreed to begin collecting sales taxes from residents, after years of insisting to local governments they had no legal rights to insist Amazon collect sales taxes from its customers. Just to recap: since Amazon has done this strategic 180 degree turnaround it has begun collecting sales tax in Arizona, California, Kansas, Kentucky, New Jersey, New York, North Dakota, Pennsylvania, Texas, and Washington—and now Virginia and Georgia. Soon it will begin taxes in Connecticut, Massachusetts, Nevada and Indiana.
Amazon's strategy no doubt infuriates other large e-tailers that have enjoyed their sales tax free status; indeed other companies such as eBay are still pushing against the idea that they must apply local sales taxes to their online customers. That is what they will have to do if the Marketplace Fairness Act is passed. The act would require online retailers to apply local sales taxes to all purchases, leveling--as its proponents like to say--the playing field with brick and mortar retailers that have no choice in the matter.
But the act, which has fierce proponents and equally as fierce critics, is not passed yet and the fight to get it across the finish line is bound to be a brutal one given the hundreds of millions of state revenues--and potentially lost sales--at stake. Hence retailers are not waiting to put in place their own strategies, such as Amazon. In a way, though, it is not fair to compare other retailers to Amazon which has struck out in many different directions, including device maker, web service provider and of course, retailer.
That is good news for the commercial real estate industry, which has a stake on both sides of the Marketplace Fairness Act. Consider, after all, what else Amazon has been doing in Virginia recently – its Amazon Web Services just opened its new headquarters on Worldgate Drive in Herndon at 12900 Worldgate Dr.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
