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Amazon “Volunteers” To Tax Mississippians: What You Need To Know

Amazon and the Mississippi Department of Revenue have announced that they have come to an agreement on a tax increase. We are just now finding out the details of this agreement, and it appears that it will cost Mississippi taxpayers 7% for online purchases.

There are some things about this new “agreement” that upset me. First off, I did not agree to anything. I certainly did not agree to a tax increase.

Secondly, my legislator did not agree to it. In fact, none of our legislators agreed to it. You see, the terms of this new tax were agreed to in private negotiations between the Department of Revenue and Amazon. There were no discussions or deliberations by legislators, no input from consumers, and no advertising of the negotiations in advance. It was just a shady back room deal between the Department of Revenue and Amazon to raise your taxes.

Scared yet?  Read on.

In statements from both Amazon and the Department of Revenue they are careful to label this new tax increase as “voluntary”. But who volunteered for this tax increase and why? As I said before, I did not volunteer for it, and legislators did not volunteer for it, so who did?

To be blunt, the Department of Revenue and Amazon volunteered us for it. I can understand the Department of Revenue volunteering us for the tax increase. It’s what they do. They’re always on the lookout for more money and will volunteer you for all your money if they think they can get by with it.

But in past administrations, some sort of legislative action was required before any increase in the sales tax. This legislative process meant that our elected representatives argued for, or against it, deliberated on it, and spoke to their constituents about it. That process allowed time for consumers to call their legislators in protest.

So you might be asking yourself right now, how did the Department of Revenue get around that pesky legislative process? Well, it’s easy enough if you just call it a “use tax,” and convince the company to charge the tax voluntarily to the sale.

Saying that the Department of Revenue convinced Amazon to voluntarily charge the tax is an understatement. In a statement to the Clarion Ledger, the Commissioner of the Department of Revenue-Herb Frierson said “If they do this voluntarily, we won’t go back and do a three year audit on them.”
It is more like Mr. Frierson made them an offer they couldn’t refuse, ala Don Corleone.

No company wants to be audited, especially by a taxing authority on a money hunt. I think it is strong- armed tactics like these, and people like Mr. Frierson, that cause all of the recent distrust in Government. If you are wondering why we have such low voter turnout, look no further than this shady backroom deal, complete with threats and secret negotiations to increase your taxes.

Calling this tax increase voluntary is key. It really is just an end run around the Legislature and the United States Supreme Court.

You see, in 1992 the Supreme Court ruled in Quill Corp v North Dakota that since Quill Corporation did not have offices, employees, or a presence in the State of North Dakota, North Dakota could not impose a Use Tax. Notice the difference in the words voluntary, and impose? The Mississippi Department of Revenue cannot “impose” a Use Tax, but they can threaten companies with legal action unless they do it “voluntarily.”

As a consumer, I do not care whether the 7% tax increase is imposed by the Department of Revenue, or if it is “volunteered” by Amazon. I do not care. The bottom line is it increases my taxes on purchases by 7%.

Governor Phil Bryant praised Herb Frierson and the Department of Revenue and Amazon for coming to an “understanding”–n understanding that will cost the Mississippi taxpayer 7%. Revenues have declined in the State for the last three years despite all of the Governor’s well-intentioned interference into the marketplace.

In my opinion, the Governor needs this tax increase to offset his failures as an economic central planner. To him, whether he gets that tax increase through the legislative process, or though back room deals using threats and intimidation, is irrelevant. He wants the money, and will praise whoever can get it for him–taxpayers be damned.

Supporters of this tax increase claim that it will help Mississippi’s brick and mortar small businesses. Nothing could be further from the truth.

To make this argument, you would have to believe that a tax increase on Netflix could have helped Blockbuster Video. That is absurd on its face. Blockbuster video failed because of advancements in technology that they refused to embrace. The same is true of the brick and mortar businesses in Mississippi.

We live in a global economy now, and your market is wide open. Go get some of it. Burdening another company so that yours may survive is wrongheaded, immoral, and will not work. You should be embarrassed for even suggesting it. If you want to succeed, build a better mousetrap. Build it faster, cheaper, and better. Focus on this, and you won’t have to worry about what your competition is doing.

Everyone involved should be embarrassed by this tax increase. Herb Frierson should be embarrassed for championing it. The Governor should be embarrassed by it for supporting it. Amazon should be embarrassed for caving in to the threats. Our Legislators should be embarrassed for allowing a Department Head to do an end run around them.

And more than anyone, the consumers in Mississippi should be embarrassed for having these people in the highest seats in State Government.

Danny Bedwell

Danny Bedwell

Contributing Writer
Danny Bedwell retired from the military in 1995. He now lives in Columbus MS with his wife and teenage daughter. He is the State Chairman of the Libertarian Party of Mississippi, former candidate for the US House of Representatives, and a small business owner. He is a frequent speaker at community and collegiate functions across Mississippi on the topics of taxation and Constitutional governance.
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