"Amazon will gain, because it already pays sales taxes on much of its sales, whereas many other online retailers do not currently collect taxes," says Amihai Glazer, economics professor and director of the program on corporate welfare at the University of California, Irvine. "Another related principal is that 'something that hurts my competitiors more than it hurts me is a benefit,' which also includes brick and mortar stores."
Other possible positive outcomes are that states will collect more tax revenue for a given sales tax rate, so perhaps they will lower the tax rate, and states like California, which require firms with a physical presence to collect sales tax, discourage firms from establishing warehouses, so such states may see a bit more investment.
The casualty? Free shipping. "States do not always tax shipping fees," he explains, "so I would expect to see less free shipping and higher charges for online shipping."
Glazer is a leading authority on relations between special interests and government, and the author of five books on public policy, as well as more than 100 articles. He has provided expert insights to the Wall Street Journal, Los Angeles Times, The Hill, Bloomberg and The Business Journals.
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