Wal-Mart Versus Amazon, The Battle Of Retail Giants

Jun 27 2011 Published by under Uncategorized

Wal-Mart is the world’s largest retailer and when they approach your city or town in order to build, they hold all the cards. Our politicians bend over backwards to acquire this giant, they offer property tax relief, build infrastructure around the store and TIFs (Tax incentive financing). The problem with this is because of all the breaks Wal-Mart receives from local governments, they can and HAVE undercut the local community stores. A small community hardware store still has to pay full taxes, while the retail giant essentially is living in town tax free.

The table was turned on Wal-Mart. Amazon.com is undercutting the retail giant because online sales are tax free in most states. The way the law is written, According to Quill Corp. v. North Dakota, a 1992 Supreme Court ruling, companies are only required to collect sales taxes from their customers when they have a presence in the state in which they reside. If you buy something from the Web site of a company that has physical stores nearby, you’ll most likely have to pay taxes. When you shop at online-only stores, you pay tax only if the store has substantial operations in your state. Since Amazon’s headquarters are in Seattle, you have to pay taxes if you live in Washington State, and because it has warehouses or other facilities in Kentucky, Kansas, and North Dakota, you’ve got to pay taxes there, too.(source)

Amazon.com is only doing what Wal-Mart has done to local mom and pop stores for 20 years. The retail giant consistently could use their “tax benefit” to lower prices and force their smaller competition out of business and become the only game in town.

Now Wal-Mart is crying foul, saying that it is unfair for Amazon to have such a competitive advantage. I guess Wal-Mart will no longer be pitting city vs city and town vs. town in regards to which slate of politicians will give them the largest tax break….don’t hold your breath.

Wal-Mart will continue the same practices and our local community business will continue to suffer. But I did find it interesting that Wal-Mart cries foul when the same tactics they use, are used against them. KARMA is such a great thing!

In my opinion online sales should be taxed, it does give corporations like Amazon an advantage. In the era of increased online shopping this only makes sense. It would be a huge revenue booster for states. According to CNBC, Mobile online shopping increased from about $369 million in 2008 to about $1.2 billion in 2009; and is estimated to reach as much as $2.4 billion in 2010.
That has the possibility to hire a few teachers,firemen and police don’t you think?

Image: Mashable

2 responses so far