President Trump just made another veiled threat to Amazon CEO and Washington Post owner Jeff Bezos.
Amazon’s Prime membership rapidly climbed throughout November and December, and the online retailer is celebrating “record levels” of sales in what turned out to be a hugely profitable Christmas season for Amazon.
2017 was an extremely impressive year for the retail giant, as One Click Retail estimates that Amazon sales accounted for about 44 percent of all e-commerce sales that year.
In most states, however, Amazon continues to allow third-party vendors a great deal of leeway in what to charge for sales tax. In cases where Amazon connects sellers to consumers, providing payment processing during transactions, it seems Amazon regularly fails to collect sales tax, causing complaints in multiple states.
South Carolina, CNBC reported last summer, filed a complaint in June alleging that Amazon left $12 million of taxes, interests, and penalties uncollected during the first three months of 2016.
It seems Bezos has again gained the attention of President Donald Trump. While signing the Interdict Act, Trump remarked that it’s unfair that an unmentioned corporation shirks paying sales tax while retailers across the country go out of business.
President Donald Trump repeated an earlier call for an internet tax, in a thinly veiled shot at Amazon‘s Jeff Bezos, who owns The Washington Post.
“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.
Trump also reiterated concerns about Amazon’s effect on the U.S. Postal Service as it struggles to keep up with online orders.
The comments mirror tweets from the president in December that named the e-commerce giant.
Bezos himself isn’t new to criticism. In 2014, he received the unique honor of “world’s worst boss” from the International Trade Union Confederation World Congress.
Repeatedly attracting the attention of the President of the United States, however, is sure to send a shiver down his spine. Trump may be gearing up to crack down on Amazon’s dodgy online tax policies.
Last month, President Trump mentioned Amazon by name when tweeting that the US Post Office, tied down by packaging regulations, loses “many billions of dollars a year” charging the retailer a meager price for package delivery.
Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!
— Donald J. Trump (@realDonaldTrump) December 29, 2017
Zero Hedge reports:
As we’ve pointed out in the past, several tech companies and industry lobbying groups rank among the biggest spenders in Washington.
Amazon collects sales tax on products it sells directly to consumers, but is more lax when it comes to sales made on its platform by third party merchants.
Indeed, the trend has already started at the state level.
In June, South Carolina filed a complaint against the online retailer, and Amazon agreed in November to take on additional third-party tax burden in its home state of Washington.
To be sure, America’s “retail apocalypse” is expected to accelerate this year. With that in mind, Trump might be pushing to preserve American companies and jobs. However, Amazon isn’t the only reason for the flood of retail company bankruptcies: Massive excess capacity, perpetually over-levered capital structures and a constant lack of capital investment have undoubtedly helped accelerate the decline.
Trump made his remarks during the signing of the Interdict Act, which seeks to reduce drug smuggling through the purchase of opioid sensors.
Bezos’s relatively unchallenged habit of forgoing collections would come under major scrutiny should Trump decide to push for new internet tax policies.