09 November 2011

Quiz: Who's better suited to handle 50 state sales tax regimes?

Amazon, or Joe's Online House of Knick-knacks?
Ars Technica | Nate Anderson | Surprise: Amazon "strongly supports" new sales tax bill

Amazon.com, the most vociferous opponent of collecting sales tax on purchases shipped outside its home state of Washington, has had a change of heart in the wake of today's new Senate tax bill, the Marketplace Fairness Act.

"Amazon strongly supports enactment of the Enzi-Durbin-Alexander bill and will work with Congress, retailers, and the states to get this bi-partisan legislation passed," said Paul Misener, Amazon vice president, global public policy, in a press release. "It's a win-win resolution—and as analysts have noted, Amazon offers customers the best prices with or without sales tax."

The states get the taxes, of course—but what does Amazon get?
Is that a serious question, or a sarcastic one? Isn't it obvious Amazon gets the same thing every dominant competitor gets when the throw their weight behind increased regulation, namely the new advantage relative to their smaller competitors of amortizing the new compliance costs over a larger revenue base? This isn't a surprise, it's a standard if-you-can't-beat-em-join-em manuever: fight the new costs, but if you can't win then buy-in so you can try and shape them in a way that gives you competitive advantage. It's the same reason Phillip Morris likes many restrictions on cigarettes, and Coors doesn't mind there being extremely byzantine state liquor boards.

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