Trump may hate Amazon, but there’s little he can do
SAN FRANCISCO — The possibility that U.S. President Donald Trump wanted to “go after” Amazon caused the retail giant to lose tens of millions of dollars in market value Wednesday, even after the White House downplayed any plans to take action.
But despite Amazon’s seemingly inexorable growth — including its buildup in groceries, entertainment and health care — there’s very little the president or the federal government could do under current antitrust practices.
As for taxes: Amazon already collects state sales tax in all states that have them, though it could be vulnerable to any new tax efforts.
“The president can hate Amazon all he wants, but he has limited power to do much about it,” said Michael Pachter, managing director of equity research for Wedbush Securities in Los Angeles.
The furor arose after news website Axios published a story Wednesday, citing five unnamed sources who said Trump is considering whether to change Amazon’s tax treatment because of the impact the online giant has had on smaller retailers.
While the White House downplayed the report, Trump himself tweeted Thursday that he has long had concerns about Amazon.
“Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” Trump tweeted.
But White House spokesperson Sarah Sanders said no specific policies were on the table in regards to Amazon.
“The president has said many times before he is always looking to create a level playing field for all businesses, and this is no different,” she said.
According to the Axios story, Trump doesn’t believe Amazon pays its fair share of sales tax. This stance isn’t new. Last year, the president blasted the company for doing damage to “tax paying retailers.”
Treasury Secretary Steven Mnuchin has said that the White House favours an internet sales tax. There have been efforts in Congress to force all e-commerce companies to collect state sales tax, but Amazon already does that.
Those moves are more likely to hit smaller e-tailers.
Amazon, and most other ecommerce companies, didn’t collect state sales taxes when they launched in the 1990s, using laws dating back as long as 50 years made for catalogue retailers.
That allowed them to keep prices low and gain market share as online sales were just beginning. However, Amazon and other big e-commerce companies now routinely collect state sales taxes.
The one area where Amazon and others might be vulnerable is on local sales taxes, which most e-commerce companies don’t collect and which stores have complained puts them at a disadvantage.
The federal government could decide to try to help municipalities collect those taxes but thus far hasn’t pushed in that direction.