It's hard to feel sorry for Walmart. But when it comes to the collection of sales tax, and how they have to do it at


Amazon's Sweetheart Tax Deal in Tennessee Makes Strange Bedfellows of Walmart and Mom-and-Pops

It's hard to feel sorry for Walmart. But when it comes to the collection of sales tax, and how they have to do it at their stores while Amazon mostly avoids doing it on its website, it does seem a bit unfair.

The question isn't whether people are supposed to pay state sales tax on their online purchases. By and large, they are.

Amazon is fighting its sales tax war on several fronts.

Rather, it's a question of whether Amazon and other online sellers have to collect those taxes. Because when they don't, very few people actually go to the effort of paying them. A 1992 Supreme Court ruling bars states from forcing online-only sellers from collecting sales tax.

As explained recently in The Street, given the tough economic times, several states have been busy figuring out ways to compel Amazon to do what non-Internet stores already do:

The target has been those e-commerce sites that work with affiliates. Affiliates are partner sites that earn commissions by advertising or linking to an online retailer's merchandise.

In response, Amazon has threatened, and in some cases, ended partnerships with affiliates in states looking to revise these rules.

Then there's Tennessee, where Amazon recently opened two large distribution centers. In return, state lawmakers dropped any demands that it collect sales tax.

Unsurprisingly, this sparked the ire of brick-and-mortar retailers, who complain that the state is essentially ceding Amazon an unfair competitive advantage in exchange for jobs. Yesterday, a Virginia-based group bankrolled in part by Walmart and calling itself Stand With Main Street came out with a TV ad (for which video seems to be unavailable), demanding that Tennessee state lawmakers make everyone play on a level playing field.

To quote:

Who gets hurt when out-of-state companies get special deals to come to Tennessee, and get a competitive advantage over local businesses? Tennessee small businesses, that's who. Every retailer on every Main Street pays the price. The price is lost jobs. Let's protect those jobs. Call your legislators.Tell them to stand with Main Street, and vote yes to stop the special deal for

We hate to say it, but they kind of have a point. Otherwise, why would Amazon be collecting sales tax from us, its loyal customers here in its home state of Washington?

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