Drive launched to rope in Amazon

Brick-and-mortar businesses pressuring Arizona for a solution to uncollected taxes
2012-07-16T00:00:00Z 2012-07-16T13:33:05Z Drive launched to rope in AmazonHoward Fischer Capitol Media Services Arizona Daily Star
July 16, 2012 12:00 am  • 

PHOENIX - The state's retailers are gearing up for what could be an extensive and expensive political and public-relations campaign to get lawmakers to start taxing items that Arizonans buy online.

Michelle Ahlmer, executive director of the Arizona Retailers Association, wants a law to force Amazon.com and similar retailers to start charging the state's 6.6 percent sales tax.

Ahlmer said the ideal solution would be if a special committee appointed by Gov. Jan Brewer to study simplifying the state's sales tax would recommend expanding the levy to include transactions by firms like Amazon.

Such a recommendation, Ahlmer said, would give the idea the implicit blessing of the governor - the committee is being headed by one of Brewer's key staffers - overcoming what Ahlmer said has been the governor's opposition to date.

But Ahlmer said her organization isn't relying on such an outcome.

She noted that Brewer has said she prefers to have Congress enact a nationwide solution. Ahlmer said if that ends up being the recommendation of the state committee, "we're not going to be OK with that."

That, in turn, will trigger a public-relations campaign designed to convince voters - and, by extension, the lawmakers who represent them - that Arizona retailers can't wait for what could be years, Ahlmer said.

Rep. J.D. Mesnard, R-Mesa, said a federal solution would be ideal. If nothing else, a congressionally imposed requirement on Internet retailers to collect sales taxes would affect all firms doing business that way.

By contrast, an Arizona-only levy would be able to reach only firms with a presence in the state. In this case, that mostly means Amazon.com, which has warehouses - it calls them "fulfillment centers" - where goods from elsewhere are processed and sent out to Arizona customers.

But Mesnard agreed that Arizona can't wait for Congress to act. "In the meantime, our retailers are suffering," he said.

Michael Hunter, the governor's adviser on tax matters, said Brewer is not convinced that Arizona needs the kind of change that Ahlmer and Mesnard want. Hunter pointed out that Arizona tax officials issued a $53 million assessment last year against Amazon for unpaid sales taxes from March 1, 2006 through 2010.

"So that process is in the works," Hunter said. He said any change in state tax laws now could undermine Arizona's legal position that Amazon already is subject to the tax.

Still, Hunter, who chairs the panel, said it will hear from experts who may disagree with his belief that existing state laws are sufficient.

Ahlmer said consumers need to be aware that some online purchases already are being taxed. That's because Internet sites operated by retailers like Target and Best Buy are legally obligated to charge the tax because they also have retail outlets in Arizona.

Legally speaking, it's not like shoppers will owe any more, she added. Under Arizona law, consumers have always been required to compute what they spend on items purchased elsewhere and then pay the equivalent of the sales tax to the state in the form of a "use tax."

Finally, she said, voters will be swayed by the unfairness of their local stores having to tack the sales tax onto purchase prices while their online competitors do not.

Don Isaacson, the Arizona lobbyist for Amazon, said he cannot comment on any of the efforts to tax his client.

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