Welcome to the Tech Policy Podcast. I'm Evan Swartzstrauber. On today's show, online sales tax, brick-and-mortar

retailers have long griped that online retailers are dodging taxes. And Congress and many states

have proposed policies to try to fix this. But in their efforts to make things more fair, while they

end up actually discriminating against e-commerce and the internet. Joining me to discuss this is

Steve Del Bianco, executive director of NetChoice, a trade association of e-commerce businesses and

online consumers. Steve, thanks for joining the show. Great to be here, Evan, and I'm grateful

that you guys are tackling such a thorny issue.

Yes, that's why we do this podcast, because it's easier to explain things in sometimes 20 to 30 minutes than 30 seconds, which is what a television talk show will give you.

But consumers, you know, who are listening to this show, might be thinking, yeah, sometimes when I buy things on Amazon, there's a sales tax. Sometimes there is not. And that might not be the reason I choose to buy something, but you

might be scratching your head just like, I don't get it. Why is it sometimes and why not? So there's

obviously a lot of bills and lawsuits following around, but what's the current state of play? When do you

get taxed? When do you not get text?

Right. This really has nothing to do with late breaking laws or lawsuits. It turns out that Amazon has increased its physical footprint across the United States to where they set up distribution

centers. This enables them to do next day delivery and increases their ability to serve their customers. But when they do it,

when they set up a fulfillment center in the state of, say, Virginia, then they have to collect sales

tax on sales they make into Virginia because they have a physical presence. And that echoes back to

150 years of U.S. law, federal doctrine that say that where you can, where you establish a

physical presence, you have to collect sales tax when you make sales to residents of that state.

And today, Amazon collects for about 98% of the U.S. population who pays sales tax.

And they've done it voluntarily because they set up

distribution centers in those states and created a physical presence by which they have to

collect sales tax under ancient law, not anything that's new at all.

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