Group wants e-sites to collect sales taxes

Retail and resort leaders on Monday detailed a campaign aimed at requiring e-commerce sites such as Amazon.com to collect state sales taxes when they sell goods and merchandise to Nevadans.

But they apparently already have tacit support from Amazon-subsidiary Zappos.com.

Zappos.com, one of the largest Internet retailers based in Las Vegas, has collected and paid sales taxes on shoes and accessories it sells in Nevada since it moved its headquarters here from San Francisco in 2004, said spokesman Aaron Magness.

Magness didn't elaborate on why the company pays sales taxes. Zappos.com opened three brick-and-mortar stores in Southern Nevada in 2007 and 2008, but the company has since shuttered them.

Amazon bought Zappos for $850 million in 2009, but Zappos kept its local management and operating base.

The sales tax campaign, orchestrated by the Nevada Retail Association and the Nevada Resort Association, targets Amazon and dozens of other e-commerce sites. The coalition argues they should have to collect sales taxes, and wants state lawmakers to consider amendments to pending legislation as early as this week.

In its statement on Monday, the retail group said revenue lost to untaxed online sales costs Nevada a many as 900 retail jobs. Bryan Wachter, president of the retail group, added the real impact is on mom and pop retail establishments that constitute the vast majority of his retail group's 1,500 member businesses statewide.

"It hits our small members the hardest," he said. He said the uneven playing field results in about an 8 percent disadvantage for Nevada retailers trying to sell the same goods with the sales tax attached.

"It's such a backward way of doing it, different from how we do it 90 percent of time," he said. "It's a tax fairness issue."

Under existing law, only retailers with actual stores in Nevada have to pony up sales taxes. For online retailers without physical stores, consumers are supposed to send the state the sales tax on their purchase. The problem, the trade groups said, is that many consumers don't know about the law and those who do don't follow it.

Amazon has argued for years that without stores and offices in a state, it has no obligation to collect sales tax there. It does have a regional distribution center in Fernley, about 30 miles east of Reno, but no retail outlets.

Projecting increased annual revenue of at least $16 million, coalition leaders argue the move would only change the way the taxes are collected, not implement additional taxes in contradiction of Republican Gov. Brian Sandoval's opposition to any new taxes.

"It is not a new tax. It is a collection issue," Wachter said.

According to the Nevada Taxation Department, about $300 million is annually spent on online sales in Nevada, which would mean $16 million annually in state sales taxes if they were collected.

Wachter said he thinks the revenue would be even greater.

He said a $50,000 campaign with 30-second television ads and 60-second radio spots will begin running in Reno and Las Vegas this week. The Nevada Resort Association, which is backing the ad campaign, represents more than 50 hotels and casinos, practically every large and medium-size gambling property from the Strip to Reno.

The Associated Press contributed to this report. Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.