As California Democrats continue to press for an unconstitutional new tax scheme targeting out-of-state, online retailers, it has emerged that an additional two retailers alleged to be backing the effort themselves decline to collect and remit tax on Internet sales made to customers resident in states in which those retailers maintain no physical presence.
Recently, Capitol Confidential reported on what was described by critics as hypocritical behavior on the part of retail powerhouses Target and Bloomingdale’s. Now, research indicates that Macy’s and Saks Fifth Avenue–both alleged to be lower-profile backers of the so-called “Amazon tax” proposal and both competitors of Overtsock.com, itself a major target of the legislation–engage in the same behavior.
The below screenshot shows an online purchase initiated at Macy’s website by a customer in Nebraska, a state in which Macy’s maintains no physical presence. The relevant webpage indicates that Macy’s intends to collect and remit no Nebraska sales tax on the transaction.
Meanwhile, this Saks purchase initiated using a zip-code for Arkansas–a state in which Saks has no stores–likewise indicates that Saks intends to collect and remit no Arkansas sales tax on the transaction.
This new information is likely to bolster claims that corporate backers of this legislation are behaving hypocritically, and that they are availing themselves of the same constitutional protections that Amazon, Overstock and others (including, critics charge, many eBay sellers) use.
That sales at Macy’s and Saks, like Target and other supporters of the legislation, have been on the rise– as opposed to a decline– further undercuts some of the main arguments being utilized by “Amazon tax” proponents, some of whom claim that the bricks-and-mortar retail industry is withering and that government should aid it by introducing new taxes targeted at online retailers. During February, Saks’ same-store sales rose by 15 percent; it was recently reported that Macy’s sales for the fiscal fourth quarter that ended in January had gone up by 5.4 percent.
Observers say that such facts may, in due course, further imperil the prospects of legislation like Assemblywoman Nancy Skinner’s AB 153 passing.
Last week, it emerged that Overstock, and not merely Amazon, intends to terminate its relationships with California “affiliates” if the legislation in question passes, the maintenance of such relationships being the trigger for tax collection and remittance obligations that the legislation would seek to impose. That has some legislators worried that in addition to the tax being unlikely to bring in anything close to the revenue Skinner claims, it could bump up California’s already staggeringly high unemployment rate that hovers above 12 percent.
It also now appears that California Democrats likely need to garner a 2/3 majority in the legislature in order to pass Skinner’s bill, and not the simple majority that bill backers had previously argued.
Proponents however say they remain committed to passing the bill this year, and further action on it in the legislature is expected.