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A Deal in the Amazon Tax War?

There’s a new deal on the table in Amazon.com’s tax war. The online retailer has been battling with various states over whether it should collect sales tax, and in some cases, pay states millions for uncollected sales tax.

Now Amazon has reportedly offered a deal to Texas to create more than 5,000 jobs and invest $300 million in the state in exchange for a four and half year exemption from paying taxes.

So what does this “lets make a deal” mentality mean for consumers and other retailers?

“This is a whole new area — trying to trade jobs for taxes,” David Stresser, Managing Director in Equity Research at Janney Montgomery Scott said. “It opens up a can of worms.”

If the state is willing to forgo taxes for jobs, then there’s no reason why Best Buy or Wal-mart can’t do the same.

“Wal-mart has a million and half jobs. They have a lot of leverage then in talking about jobs out there,” he said. “It could get ugly and it could change things pretty dramatically.”

The consumer, however, isn’t off the hook for paying taxes. Stresser pointed out that if Amazon doesn’t collect a sales tax, the customer is supposed to pay the tax themselves. In fact, he said, some states’ tax returns now ask how much you have spent online.





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