About That $1 Billion Tax Gap Caused by Amazon (a Roundup)
A new report released this week at the Winter Institute conference states that Amazon has cost local and state governments a billion dollars in tax revenues each year.
The report was produced by the American Bookseller Association and a research firm called Civic Economics, and according to the report on the Civic Economics website:
- In 2014, Amazon sold $44.1 billion worth of retail goods nationwide, all while avoiding $625 millionin state and local sales taxes.
- That is the equivalent of 3,215 retail storefronts, 107 million square feet of commercial space, which might have paid $420 million in property taxes.
I’m not planning to cover it in depth because I don’t feel like repeating the ABA’s propaganda today, but I will note that the billion dollars is a negligible sum of money.
I live in Prince William County, VA, which has a population of close to two billion dollars. Forty percent of that budget is generated from property taxes (and another 8% from sales taxes).and an annual govt budget of
In other words, one small county outside of DC generates more property tax than the entire Amazon tax gap. Multiply that across the thousands of local govts in the US and you begin to see just how small that gap really is.
I would also point out that there’s a problem with the second conclusion, that Amazon is indirectly responsible for $420 million in potential property taxes paid by retailers who don’t exist because you shop at Amazon.
Here’s what the report says:
In addition, we estimate that the shift to online sales has resulted in a national reduction in demand for retail space totaling over 100 million square feet, the equivalent of over 30,000 traditional storefronts employing 136,000 workers. These land use changes result in uncollected property taxes of $420 million dollars.
Given that big box retailers killed off the need for those storefronts long before Amazon came along, that is unlikely to say the least.
image by Sam Howzit