Wal-Mart Stores Inc., the world’s largest retailer, has some dirty laundry to air. According to the LA Times, the top backer of so-called “Amazon Tax” laws itself fails to collect sales tax on items sold through its site and paid for via credit card transactions processed by the company– a practice that looks suspiciously similar to that of top online retailers with regard to sales made to consumers in states in which the retailers maintain no physical presence.
Indeed, CSN Stores, a Boston-based company that markets through Wal-Mart, and arguably Wal-Mart itself as an entity through which CSN sells, appear to be availing themselves of the exact same constitutional law protection as Amazon and Overstock. Sales tax on CSN products is only added to a Wal-Mart transaction where shipments of products bought through Wal-Mart are headed to Utah or Massachusetts, states where CSN maintains a physical presence. No sales tax is added to purchases made by Californians, even though Wal-Mart’s website is reportedly operated out of the Golden State.
This is despite the fact that under California’s new “Amazon Tax” law– for which Wal-Mart heavily lobbied– the retail giant would appear to be under an obligation to collect sales taxes in respect of CSN goods sold to Californians.
California Board of Equalization member Betty Yee, a proponent of the “Amazon Tax” law, considers Wal-Mart subject to the same obligations as Amazon, with an additional responsibility to act given Wal-Mart’s role in aggressively pushing the legislation.
“As a leader in trying to enforce the new [law], they also should be leading the charge in terms of being very clear about the application of the tax on all transactions with California consumers,” Yee said to the LA Times. Yee is reportedly seeking an investigation into whether Wal-Mart is currently violating the same law it has employed a virtual army of top-flight lobbyists and political consultants in Sacramento and Washington, D.C., to advance.
The Quill Corp v North Dakota Supreme Court decision that establishes that Amazon, Overstock and others are not obliged to collect and remit sales taxes where they sell to customers in a state in which the relevant retailer maintains no physical presence likely presents good legal grounds for Wal-Mart’s practices.
However, critics say that will do little to undercut charges of hypocrisy or diminish claims that Wal-Mart’s pursuit of “Amazon Taxes” has nothing to do with enforcing legal obligations and rather is about using the arm of government to gain what Wal-Mart hopes will be a competitive advantage, guaranteed by legislation.