January 6

January 6, 2019


Today’s Times investigates commercial property valuations for the purpose of tax collection. The article suggests that brick-and-mortar retailers are gaming the system to unfairly reduce their property value and therefore pay local governments less in taxes. In Michigan, from 2013 to 2017, this may have cost local government $100 million.

While this a fair investigation to undertake, I ask the Times to investigate the harmful tax effects of millions of shoppers buying at Amazon. Should we be devoting front page stories to the antics of struggling brick-and-mortar retailers while Wall Street darlings like Amazon pay very little in taxes compared to other retailers? From what I understand, Amazon’s tax impact way outshines what the culprits may be doing in this article. How much did Michigan lose due to Amazon from 2013 to 2017 in tax revenue? (And to how many job losses did Amazon contribute?)

While on the topic of investigating the actors in tax generation, here’s a story idea: the Times can take nurses, teachers, and civil servants to task for shopping at Amazon and defunding their local community’s tax coffers--while having their salary rely on this very local tax base. They’re shooting themselves in the foot. It’s like a drug problem. We have narco dealers and narco users. But in this case the addiction is: cheap online shopping regardless of the long-term costs. Our communities are going to suffer more tax and job loss unless we address this soon.

A notable bright spot for local tax collection was the recent Supreme Court decision that overturned Quill. States are now allowed to charge tax on more online purchases, and some have already started. As an example, Michigan started on October 1st, 2018 charging tax on goods shipped to the state by entities with no physical presence there. Previously, a shopper in Michigan would order a blow dryer from a business in Illinois in order to skip paying Michigan tax. Now the shopper must pay tax. (Read more about Michigan's new tax collection policy here)

Read the full NYT article about commercial property tax assessments here

Tags: Amazon, property taxes, e-commerce, nyt

Jason Solarek picture
Shared by Jason Solarek



Comments:
01/06/19 · 12:22 PM
Jason Solarek picture
Jason at Bridge:
Private comment
On the web page below, Tennessee supposedly lost $23 billion due to online shopping (aka Amazon) in just one year (2012). Notably, online shopping has grown about 20% every year since 2012 so we surely need more recent data. Using this 2012 number, we can see that online entities cost us way more than $25m the Times is balking about regarding Michigan. Simply put: Amazon was likely doing 100x more damage than the property tax dodgers.

https://www.bna.com/sales-tax-slice-b17179889384/



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