An article in the Arizona Republic reveals that Arizona retailers are asking Governor Jan Brewer to level the playing field between bricks-and-mortar and online stores. A bill currently stalled in the Arizona legislature would require Amazon, which has four warehouses in the state, to collect sales tax on purchases made by Arizona residents.
The article says that Governor Brewer has refused to get involved, saying that this is an issue for the federal government to deal with.
While we fully support Arizona retailers and believe that online retailers should be collecting sales tax, we also agree with Governor Brewer (in fact, we sent her a letter to that effect).
Because of the limitations imposed by the Supreme Court cases Bellas Hess and Quill, only Congress can level the playing field for online and bricks-and-mortar retailers. We hope Governor Brewer will communicate her support for congressional action to Arizona Senators Kyl and McCain, ideally in advance of the rapidly approaching Senate Finance Committee hearing on April 25 (which is another blog post we’ve been meaning to get to).
By the way, we found a factual error in the Arizona Republic article: It erroneously says that Amazon sales are tax-free in Arizona. But like every other state with sales tax, Arizona applies sales tax to online purchases. If sales tax is not collected at the time of purchase (and online, it usually isn’t) the purchaser is supposed to report and pay the tax directly to the state.