Wal-Mart skirts some online taxes through third party

August 30, 2011 9:26:29 PM PDT
You know the old expression about people in glass houses... well, Wal-Mart is learning that lesson over a change in California's tax code. Wal-Mart has been an outspoken critic of Amazon not charging sales taxes on most of its online purchases in this state, but as it turns out, Walmart.com isn't always collecting it either.

With Wal-Mart as a major financial backer, local business-owners and Democrats calling themselves Stand with Main Street denounced Amazon's effort last month to overturn California's new online sales tax law through a referendum.

It turns out that even though it wants the online sales tax enforced, Wal-Mart's website doesn't always collect the sales tax, making one store owner from the July event feeling a bit jolted.

"I guess you could say cheated, walked-over by the big box store again," said owner Lauren Lundsten from Swanberg's On J.

Walmart.com, which is based near the San Francisco International Airport, sells numerous items from a third party: Boston-based CSN Stores. The transactions take place on Walmart.com, but the sales tax isn't collected from California customers.

CSN even touts online, "One of the best things about buying through CSN Stores is that we do not have to charge sales tax."

St. Sen. Loni Hancock, D-Oakland, led the push on the online sales tax and believes Wal-Mart should be adding it.

"I think that the State Board of Equalization needs to collect the sales tax that is owed this state from any company that isn't paying it," said Hancock.

Neither e-tailer returned emails for comment, but a Wal-Mart spokesman told the Los Angeles Times its online arm doesn't have to collect the sales tax unless the vendor tells them to.

"I'm not defending Wal-Mart, but I think it goes to show you what lengths California businesses will go in order to compete with Amazon," said St. Assm. Charles Calderon, D-Montebello.

Despite the controversy, the campaign to fight Amazon and keep the online sales tax law intact wouldn't turn away Wal-Mart's deep pockets. It's a bitter pill for shop owners.

"I don't see Wal-Mart as being on my side or caring about the brick-and-mortar shops at all," said Lundsten.

Democrats are trying to push another version of the Amazon tax through the Legislature, but this time with a two-thirds vote. Laws passed with a two-thirds majority cannot be overturned through the referendum process.


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