Amazon requesting some of its sales tax back from California cities

An article in the Wall Street Journal (May 31, 2012) describes a request by Amazon, which recently agreed to collect sales taxes for purchases soon, to get back some of the sales tax as an incentive. The company claims that its warehouse locations were justified based on location and logistics costs, but claims to follow practices used by other retailers such as Kohl’s. Given that a portion of the sales tax is meant to cover local costs, should cities be allowed to give it back to retailers or should they just reduce tax rates ? Given that many other retailers do not receive such incentives, could providing such incentives to Amazon be a competitive requirement ? Could the jobs generated by the warehouse, and associated tax benefits, be considered a sufficient reason to provide a break to Amazon ?

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About aviyer2010

Professor
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One Response to Amazon requesting some of its sales tax back from California cities

  1. James Dumler says:

    Looks like Amazon is trying to get tax breaks in several states right now by agreeing to build warehouses and distribution centers in various states according to the Washington Post – http://www.washingtonpost.com/national/amazon-agrees-to-end-sales-tax-holiday-in-nj-build-2-warehouses/2012/05/31/gJQAhT3Y4U_story.html

    “The retailer has agreed to build job-creating distribution centers in Indiana, California, Tennessee and South Carolina in exchange for sales tax exemptions. It had requested a 22-month sales tax exemption in New Jersey.”

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