Should We Institute Tax On Internet Sales?

Trump leaning toward internet sales tax because ‘it’s very unfair what’s happening to retailers’

Jan 11, 2018 4:03 pm

President Donald Trump is talking about an Internet tax, and it appears to be aimed at Amazon. (Leon Neal/Getty Images)

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Teri Webster

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Is President Trump calling for an internet sales tax?

President Donald Trump appears to be pushing for an internet sales tax for the second time in as many months, CNBC reported. And his comments seem to be directly aimed at Amazon.

“The internet — they’re going to have to start paying sales tax because it’s very unfair what’s happening to our retailers all over the country that are put out of business,” Trump said Wednesday. He made the comment to media and members of the administration during the signing of the Interdict Act, which seeks to reduce drug smuggling, CNBC reported.

Trump also repeated his concern that Amazon is putting a strain on the U.S. Postal Service.

In December, Trump tweeted that the U.S. Postal Service is losing billions while making Amazon richer.

Could this really happen?

One analyst called Trump’s comments nothing but hot air.

“There’s always been a fear for players like an Amazon or a Google that something like this could actually get through,” Daniel Ives, head of technology research at GBH Insights, told CNBC. “We believe it’s more noise than a real threat.”

Ives said the discussion is notable, but he believes an internet tax is unlikely to ever come to pass.

Others speculate that Trump is angry at Amazon president and CEO Jeff Bezos because his newspaper, The Washington Post, publishes articles that are critical of the president.

Are states losing sales tax revenue?

The issue includes questions about why third-party vendors can pay varying levels of sales tax, CNBC reported. Some state leaders say that is not fair.

The state of South Carolina, for example, filed a lawsuit that alleges Amazon was responsible for “$12 million in uncollected taxes, interests, and penalties for the first three months of 2016,” CNBC News reported. Amazon has denied the claim, and called the lawsuit “without merit.”

Amazon is also cutting into overall retail sales. Amazon made about 44 percent of all U.S. e-commerce sales last year. That’s about four percent of the nation’s total retail sales.  And, Amazon had its biggest holiday shopping season in 2017.