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Bloomberg
President Donald Trump “feels strongly†that the US should permit collection of state and local sales taxes on purchases made over the internet, Treasury Secretary Steven Mnuchin said.
Mnuchin, speaking at a hearing before the House Ways and Means Committee, said he has spoken with Trump about the issue, and that the president “does feel strongly†that state and local taxes should be applied to the purchases.
The prospect of an collecting sales tax on online purchases has been a long-standing point of contention between internet-based retailers and their brick-and-mortar rivals.
Trump has previously gone after internet giant Amazon.com Inc., saying in 2017 that it does “great damage to tax paying retailers.â€
Brent Gardner, chief government affairs officer for Americans for Prosperity, a political network led by billionaire industrialists Charles and David Koch, blasted the idea of requiring online retailers to collect state and local sales taxes as tantamount to creating “new taxes on everyday consumer goods such as items purchased over the internet†that would “disproportionately impact those who can least afford it.â€
Amazon began collecting sales taxes on purchases in all states that levy them earlier in 2017, despite an exemption that allows online retailers to avoid collecting them in places where they don’t have a physical presence.
But Amazon still avoids charging shoppers sales taxes when they buy from one of its third-party vendors—sales that make up about half the company’s volume.
Untaxed third-party sales might provide an advantage over brick-and-mortar retail chains, which have their own robust online operations but have to collect sales tax on all purchases in states where they have physical presences. Many large chains have stores in almost every state.
At the federal level, several bipartisan bills have been introduced to
allow states to mandate collection
of the taxes, with the most recent
one re-introduced in 2017 and endorsed by Amazon. A previous bill passed the Senate.