Greg Eid buys a lot of household goods on Amazon.com.
He'll continue buying diapers and other low-cost items for his
6-month-old daughter from the popular online retailer, despite the website's
plan to collect sales tax in Pennsylvania starting on Saturday.
But Eid, 28, of Mars said he probably won't buy bigger-ticket items from
Amazon, such as the laptop computer and digital camera he bought online
recently after looking at them in person at an electronics store.
"What's the incentive now, if I can go to the store and come home with
the product for the same price, rather than waiting two days?" he said. "For
Amazon, they're going to have to find a way to differentiate themselves
again."
Many regular Amazon shoppers on Thursday said adding the state's 6
percent sales tax to online purchases wouldn't change their buying habits.
Amazon will collect Allegheny County's extra 1 percent sales tax and
Philadelphia's extra 2 percent, state officials said.
The Department of Revenue on Thursday said it expects "substantial
compliance" with its Saturday deadline requiring e-commerce companies with
physical presence in Pennsylvania, such as a warehouse, to register and begin
collecting sales tax.
"We've heard back from a number of retailers about their willingness to
comply," Department of Revenue spokeswoman Maia Warren said, though she would
not name companies with which department officials are talking.
The department in December issued a tax bulletin to clarify the state's
sales tax nexus law for remote sellers. It initially set a February compliance
deadline. Businesses that don't comply would face assessments, audits, liens
or referrals to collection agencies or the state attorney general's office.
Amazon.com Inc., the nation's largest online-only retailer, this week
reversed its stance on the directive to remit sales tax. Seattle-based Amazon
has six fulfillment centers in Pennsylvania and collects sales tax on orders
shipped to Kansas, Kentucky, North Dakota, New York, Texas and Washington. It
plans to do the same with California orders starting Sept. 15.
"We believe that customers will continue to come to Amazon because we
offer the best prices with or without sales tax," spokesman Scott Stanzel
said.
Natale Cozzolongo, 26, of Shadyside chooses Amazon for the selection,
convenience, good prices and quick delivery when he buys books.
"These benefits outweigh paying sales tax," he said. "I'm not necessarily
happy to pay it, but I don't see why there's an exception" for online-only
retailers.
Amanda Chase, 33, of Ross buys "everything from books to peanut butter"
on Amazon and doesn't expect sales tax will slow down her purchases.
"Their prices are lower to begin with," she said. "The convenience
outweighs almost everything."
Others, such as Jeff Gross, said they will search out other online
retailers that won't collect sales tax.
"There's taxes on taxes on taxes, and it's never enough," said Gross, 59,
of Export. "As a consumer, I have to save money however I can."
The Alliance for Main Street Fairness, with 800 member businesses in
Pennsylvania, hailed Amazon's decision as a step toward leveling the playing
field between traditional retailers and online shops.
"It's only fair, it's only right," Alliance spokesman Dan Hayward said.
"Year after year, we have seen the online-only competition only getting more
fierce."
Though the alliance hopes other large retailers such as Overstock.com and
eBay.com follow Amazon's lead, an eBay Inc. official said Pennsylvania's
requirement doesn't apply to the auction site that joins buyers and sellers.
Brian Bieron, senior director of government relations, said that "eBay is
not a retailer. eBay is a marketplace that is used by shoppers, retailers and
other sellers."
Salt Lake City-based Overstock has no facilities outside Utah, said the
company's general counsel, Mark Griffin.
"If we had a warehouse or employees in Pennsylvania, we would collect
sales tax on Pennsylvania sales," he said, citing a 1992 Supreme Court
decision disallowing states to collect from retailers with no physical
presence there.
Pennsylvania has said it lost out on $345 million in sales tax
collections last year because Internet and catalog sellers with no presence
here don't remit sales tax. The state collected $8 billion in sales tax last
year, or about 32 percent of all tax revenue.
