Retailers want online stores to start collecting sales taxes

By David McGrath Schwartz

Saturday, May 14, 2011 | 1:55 a.m.

CARSON CITY — Brick-and-mortar retailers want online stores in Nevada to start collecting sales taxes, causing one Internet giant to threaten to reconsider its investment in warehouses in the state.

The Retail Association of Nevada plans to introduce an amendment next week that would require stores such as Amazon.com to collect sales taxes. Amazon and other online merchants without a retail outlet do not collect sales taxes. Theoretically, customers are supposed to send the 7 to 8 percent sales tax (depending on the county) to the state, but seldom do.

The additional tax collected by the online stores could raise about $32 million over the next two years.

“This levels the playing field between small retailers and online-only companies,” said Bryan Wachter, director of government affairs for the association.

No one from Amazon was available to comment. But in a statement, Paul Misener, an Amazon vice president, said the legislation “would make us reconsider our pending plans for jobs and investment in Nevada, including in Las Vegas.”

The law says a sales tax has to be collected on online sales when stores have a “physical presence” in the state. Fulfillment centers, or warehouses, like Amazon has in Fernley “are separate from our retail business and do not make sales or accept payments or returns,” Misener said in a statement.

Similar legislation is being pushed in other states, and some reports say that big-box retailers such as Wal-Mart and Target, which collect sales tax on online sales, are behind the movement.

The Retail Association began a television and radio campaign last week to support the legislation, which it calls “E-Fairness.”

Retailers commissioned a study by Applied Analysis that estimates as many as 900 jobs are lost in Nevada because of the discrepancy between the physical stores and online retailers.