Melville House Books

December 5, 2011

Pennsylvania to Amazon: Time’s up

by Dennis Johnson

Amazon.com's Lehigh Valley warehouse (Photo credit: US Occupational Health and Safety Administration)

Just days after Cyber Monday, the state of Pennsylvania has issued a warning to “remote” retailers that they have 60 days to begin collecting sales taxes.

According to report by Jim T. Ryan in the Central Penn Business Journal, the state estimates it will lose $380 million this year in uncollected taxes from internet sales. So, the state’s Department of Revenue posted a “regulatory bulletin” (PDF) saying “it will enforce the collection of sales taxes by any remote retailer, including catalog and online retailers with a physical presence in Pennsylvania.”

The move seems to be a no-nonsense message to none other than Amazon. As we’ve noted in numerous reports, the company has been simply refusing to collect sales taxes across the country since its inception, moving its business out of states that force it to abide by the law, and often enough dropped affiliate business in retribution as well. But, as the economy worsens and more and more states have taken action against Amazon, the company has negotiated deals to collect the taxes … eventually. Meanwhile, it’s been advocating a new national law to regulate online sales taxation. Whether this complicated law will ever be passed, and whether it will be of advantage to Amazon or the consumer, remains to be seen. But meanwhile, it provides Amazon with an excuse to ask people to stall further, even as it also aggressively lobbies to get individual states to change their laws.

But Pennsylvania seems to be saying they’re not going to go there. Revenue Secretary Dan Meuser announced that the state “was not interested in creating new tax law to resolve such issues,” and instead, was preparing to enforce existing laws.

“It’s simply a matter of fairness under the existing law,” he says in the bulletin, “and it’s essential that both e-commerce retailers with nexus and brick-and-mortar stores in Pennsylvania, many of which are small businesses employing thousands of Pennsylvanians with retail jobs, are treated equally.”

The CPBJ report notes, “This means companies such as Seattle-based retail and technology giant Amazon.com would be required to collect and remit sales tax to Pennsylvania. Amazon operates two warehouses in Cumberland County and a third in York County.”

Readers may recall one of these warehouses, in Lehigh Valley, was in the news several months ago when a Morning Call report revealed worker conditions were so bad that Amazon kept ambulances stationed at the entrance to the warehouse.