Treasury secretary comments on Amazon's tax practices in sign Trump may be taking aim at Bezos

Key Points
  • Treasury Secretary Steven Mnuchin said he does not "understand the consistency" of Amazon collecting taxes on its own sales, but not for "third-party" sellers on its marketplace.
  • "Third-party" sellers represented 50 percent of Amazon's total unit sales in the first-quarter, according to JMP Securities.
Mnuchin questions Amazon's taxes on marketplace
Mnuchin questions Amazon's taxes on marketplace

Treasury Secretary Steven Mnuchin hinted the administration may soon take "a position" on Amazon's tax collection policy after President Donald Trump blasted the company on the topic last month.

Sen. Joe Manchin asked Treasury Secretary about his view on internet state sales taxes at a Senate hearing Wednesday.

"So this is an issue that we've been looking at very carefully within the administration and we expect to come out with a position shortly," Mnuchin said. "I am encouraged that Amazon is now charging tax, I believe, on their own sales but not the marketplace. I'm not sure I understand the consistency on that, but I respect the states' ability that there's an awful lot of money that's not being collected."

Mnuchin is referring to e-commerce giant's "third-party" marketplace, where other firms sell goods on Amazon's website. This compares to its "first-party" business where the internet company sell products directly to customers.

"Third-party" sellers represented 50 percent of Amazon's total unit sales in the first-quarter, according to JMP Securities. The internet company charges the outside parties a fee for selling on Amazon's website.

Amazon does offer a state sales tax collection feature to "third-party" sellers, according to the Wall Street Journal. However, it is unclear how many use the service.

As of April 1 this year, Amazon began collecting state sales tax nationwide for products it sells directly, so called "first-party" sales, with the exception of states that don't have a sales tax: Alaska, Delaware, Oregon, Montana and New Hampshire.

Mnuchin's comments come soon after President Trump tweeted three times bashing the "Amazon Washington Post" from July 22 to July 24. He also blasted Amazon for "not paying internet taxes" in June.

Tweet Link

During a campaign rally in February 2016, Trump told the crowd: "If I become president, oh [does Amazon] have problems. They're going to have such problems." He added its CEO Jeff Bezos only bought the Washington Post to have "political influence."

— CNBC's Lauren Thomas and Darla Mercado contributed to this report.