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The Trump Organization's online store on Monday quietly added Virginia to the list of states in which it collects sales taxes, following reports that the site collects such taxes in just two states.
As late as Monday morning, the Trump Organization's official retail site, Trumpstore.com, only identified Louisiana and Florida among the states in which it collects sales taxes.
By Monday afternoon, however, the website added Virginia to the list.
"Trumpstore.com has always, and will continue to collect, report, and remit sales taxes in jurisdictions where it has an obligation to do so," a representative for the Trump Organization told CNBC. The statement was identical to the one the the company provided last week.
The page on the Trump Store website identifying the states in which it collects sales taxes appears to have been added on Nov. 7, 2017, according to an online search.
Click to enlarge:
The small handful of states where the Trump Store collects sales taxes was first reported by RedStateDisaster and then by The Wall Street Journal. The reports came as President Donald Trump continued to attack online retailer Amazon on several fronts, including how it collects sales taxes.
Although the Trump Organization is headquartered in New York, the store does not claim to collect sales taxes in the state.
There are 45 states that levy sales taxes. Tax experts speculate that the Trump Organization could be employing a tactic commonly known as "entity isolation" to avoid levying sales taxes in most of those states. Such a strategy would class the organization's website as a separate entity from the physical locations around the country — including Trump's golf courses, resorts and the headquarters itself.
But this exemption may not apply to New York. The online store's explicit connections to the brick-and-mortar storefront in Trump Tower potentially classify it as a sales tax vendor in the state.
"The Trump Organization should be paying sales taxes on any goods that they're selling in New York state," said Ron Deutsch, executive director of the New York-based Fiscal Policy Institute.
According to the New York Department of Taxation and Finance, online retailers are considered sales tax vendors if they "maintain a place of business in the state, such as a store, office, or warehouse, and sell taxable, tangible personal property or services to persons within the state."
The Trump Store website defines itself as the "official retail website of The Trump Organization " and encourages visitors to "visit our brand new Trump Tower flagship retail store" located in Trump Tower's "garden level."
"You have Trump Tower New York and the Trump Store in Trump Tower pointing people to the site, essentially being salespeople," Carl Davis, research director of the nonpartisan Institute on Taxation and Economic Policy, told CNBC.
A spokesman for the New York Department of Taxation and Finance said secrecy laws prevent it from commenting on specific taxpayers.
"It seems like they're using a similar strategy as Amazon, but they're taking it further," Davis said when told of Virginia's addition to the Trump Store's list.
Amazon avoided collecting sales taxes for years in most states reportedly using the entity isolation loophole — but collected sales taxes in Washington, where its headquarters are located, since 1995.
The precedent for the out-of-state exemption extends to a 1992 Supreme Court case in which the majority ruled that retailers are not required to collect sales taxes in states where they do not have a "physical presence."
Amazon, which the president recently attacked for paying "little or no taxes to state & local governments," exploited this same loophole to avoid collecting sales taxes on billions of dollars worth of products sold online, The New York Times reported as early as 2009.
But ironically, Trump's latest salvo against CEO Jeff Bezos' e-commerce behemoth arrived just as Amazon began collecting sales taxes in all the states where the tax exists.
As of April 1, Amazon has collected sales taxes on items shipped to 45 states, as well as Washington, D.C., and Puerto Rico, according to the company's website. Just three days earlier, the president excoriated the company for its tax avoidance practices.
The White House later clarified that Trump's critical tweets referred to the tax loopholes of third-party sellers on Amazon's site.
Trump sharply diverged from other modern presidents by refusing to divest from his businesses upon taking office, and by declining to disclose his tax returns.
The White House referred CNBC's questions about the Trump Store to the Trump Organization.