Karl Denninger explains the rationale underlying the unholy alliance between big business and big government in explaining why Amazon is welcoming online sales taxes:
Amazon, for its part, has engaged in this sort of screwball deal with its distribution centers in various states, arguing that this doesn’t give them nexus and thus they don’t need to collect tax. When threatened they reply with the threat to close the center and fire the employees (who are residents of the subject state) or sue, which effectively stalls the clock. This set of tactics has “worked”, because Amazon (and similar firms) are huge corporations with internal legal staffing that can fight these things and, at worst, delay the outcome driving up the costs for the states and there is virtually no chance that the company or its officers will be indicted by the states in question for tax evasion, as is the case for a small business. The problem is that as these cases have gone on over the years it has become increasingly apparent that Amazon and these other retailers will eventually lose and be forced to both pay and collect the taxes and might be exposed to penalties, interest and retroactive tax billing for willful evasive activity.
So what Amazon appears to have decided to do is play screw the other guy by forcing them into having a “virtual” nexus that otherwise would not exist! This is then sold to people as “fairness.”
It is nothing of the sort.
Amazon could choose to have distribution centers only in no-sales-tax states. It could then tell the rest of the states to “pound sand.” There is a long-standing US Supreme Court decision (“Quill”) that they can stand behind if they take this approach and are without question in the clear in doing so. But by doing so Amazon would have a serious problem because transit time and cost become a big problem, and since everyone wants everything right now, shipping cost is a huge expense and getting larger, and Amazon sees both cutting that cost and increasing speed of delivery as a competitive advantage (it is) they want to open distribution centers close to the people who shop.
But that leaves them with a problem because to do that they create nexus, and with nexus comes compliance costs. Since they’ve become increasingly unable to avoid this and meet their business goals they now seek to use the jackboot of government to shove it down their competitors’ throats!
Obviously, Amazon would prefer no sales taxes. But if they’re going to have to pay them anyhow, then it is much better for Amazon if everyone, including their competitors, is forced to deal with the compliance costs that Amazon is much better suited to pay given its size. Large corporations can more easily afford to comply with regulations, as the employees required to do so make up a much smaller percentage of their total workforce.
This is a relatively harmless example, but it should suffice to demonstrate the absurdity of pretending that big business is the enemy of big government.