WASHINGTON, April 13, 2011 /PRNewswire-USNewswire/ -- A recent survey conducted by Forbes Magazine named Internet retailer Amazon.com the most reputable company in America.
But taxpayers preparing their returns this April may soon be questioning that accolade, as many are in for a bit of a shock if they've been frequenting the online-only giant.
By refusing to collect sales taxes, even firing small business partners in five states and threatening to lay off employees in Texas to avoid having to do so, Amazon has exposed its customers and forced them to calculate, track and remit the sales taxes from products purchased on its Web sites.
The catch: Most of their customers don't even know they owe the tax, and Amazon goes to great lengths to avoid informing them of the truth.
How does this affect tax returns?
By not collecting their customers' sales taxes at the point of purchase much like most retailers across the country are required to do, Amazon's customers must report on Tax Day those taxes owed on their state income tax returns. But because most of their customers are unaware of this obligation, many fail to report the tax owed on their returns, and as a result, states are now cracking down and Amazon's customers could be audited or penalized.
Firing employees to avoid collecting sales taxes… Leaving customers in the dark and vulnerable… That certainly doesn't seem to fit the definition of "reputable."
"Amazon has built its entire business model around the premise that they don't have to collect the sales tax, and they've gone to great lengths to keep their customers in the dark about the tax owed once a purchase has been made," said Danny Diaz, spokesperson for the Alliance for Main Street Fairness (AMSF). "Whether it's leaving their customers liable or hurting small businesses, it seems very hard to argue Amazon is a good corporate citizen."
Forbes Magazine might want to hold on to that #1 trophy before engraving Amazon's name at the top. Taxpayers audited thanks to Amazon's business practices may soon be asking for a recount.
SOURCE Alliance for Main Street Fairness