RENO, Nev.—A coalition of hotel-casinos and small businesses is launching a $50,000 advertising campaign to build support for a change in tax laws so Amazon.com and dozens of other e-commerce companies would have to collect state sales taxes when they sell goods to Nevadans.
Leaders of the Retail Association of Nevada and the Nevada Resort Association planned a formal announcement Monday detailing the proposals they hope to persuade state lawmakers to consider as amendments to pending legislation as early as this week.
Projecting increased annual revenue of at least $16 million, they argue the move would only change the way the taxes are collected, not implement additional taxes in contradiction of Republican Gov. Brian Sandoval’s opposition to any new taxes.
“It is not a new tax. It is a collection issue,” Bryan Wachter, president of the Nevada Retailers Association, said in an interview with The Associated Press.
Under current law, Amazon.com is not required to collect the sales tax in Nevada. Amazon.com customers here must fill out tax forms concerning their purchases and send their sales tax payments to the Nevada Taxation Department.
The problem, Wachter said, is few people are aware of that, and even fewer actually do it. Meanwhile, Amazon.com Inc. and others refuse to collect the sales tax in Nevada at a cost of millions to the state.
Amazon has argued for years that without stores and offices in the state, it has no obligation to collect sales tax there. It has a regional distribution center in Fernley about 30 miles east of Reno but no retail outlets.
Wachter said the current system is unfair to Wal-Mart Stores Inc., Target Corp., Sears Holding Corp.’s Kmart and other companies with traditional retail outlets that collect state sales taxes. They do so because they also sell through retail stores in Nevada.
The Nevada coalition suggests a variety of ways to make the change in state tax law based on variations recently enacted in New York, Texas, Colorado and Illinois—all of which Amazon maintains are unconstitutional.
California, Arizona and Massachusetts are among other states currently considering passing their own flavor of online sales tax collection legislation. California lawmakers had passed a bill in 2009, but the governor vetoed it.
Amazon maintains the only legal way to require collection of the sales taxes is for Congress to mandate a uniform system across the country, something Congress has been reluctant to do.
Amazon “supports a truly simple national solution, evenhandedly applied,” said Paul Misener, Amazon’s vice president for Global Public Policy.
“Other state-by-state legislation is clearly unconstitutional,” he said in an statement emailed to the AP on Sunday. He said in an earlier statement that Amazon plays “by the same rules as other retailers, as the national chains collect online only for states where they have physical stores.”
The Nevada Resort Association, which is backing the ad campaign, represents more than 50 hotels and casinos, practically every large and medium-size gambling property from the Las Vegas Strip to Reno.
But Wachter said the real impact is on the mom-and-pop retail establishments that make up the vast majority of his retail group’s 1,500 member businesses statewide.
“It hits our small members the hardest,” he said. He said the uneven playing field results in about an 8 percent disadvantage for Nevada retailers trying to sell the same goods with the sales tax attached.
“It’s such a backwards way of doing it, different from how we do it 90 percent of time,” he said. “It’s a tax fairness issue.”
According to the Nevada Taxation Department, about $300 million is annually spent on online sales in Nevada, which would mean $16 million annually in state sales taxes if they were collected.
Wachter said he thinks the revenue would be even greater. He said the 30-second TV ads and 60-second radio spots will begin running in Reno and Las Vegas this week.
