Sales Tax: Amazon Has A Point

Farhad Manjoo often does a fantastic job at the Slate Magazine in explaining the confluence between technology and business, but in seeing technology as business. His latest piece addresses his view on taxation by different US states on the taxation of goods sold by Amazon. As usual, the coverage of the issues is comprehensive.I am less sanguine about the conclusion that Amazon is reluctant to collect taxes on behalf of states because it has no incentive to do so. 

It is obviously true that Amazon is aware that a tax levy on goods that it sells would cause a reduction of quantities purchased. However, the view that Amazon is capable of putting up a system that would track and keep data on taxes due to each state enable the is only half true because keeping this clearing house is not without cost. In essence, I am reluctant to blame Amazon for the fact that states impose taxes that not only reduce trade but also impose tracking costs on businesses.With that in mind, it may be that the states that impose taxes externalize the problem of maintaining records while picking their revenue. I think Amazon is right to state its concerns about that.