This week, Amazon announced it would be required to collect and remit sales tax in Washington, D.C., beginning October 1, 2016. A year ago, bricks-and-mortar booksellers in the District urged the mayor to require the online giant to collect and remit sales tax; however, this week’s announcement appears to have nothing to do with leveling the playing field for independent bookstores. The requirement to collect sales tax likely stems from Amazon’s negotiations to open a store in the District of Columbia, according to media reports.
The lingering, and as of publication time unanswered, question is whether or not Amazon will be receiving any kind of tax break or subsidy to set up shop in the capital — a fairly common occurrence in states where Amazon has opened warehouses.
Last fall, Amazon opened a retail store in Seattle, where its operations are headquartered. It followed that up with a store in San Diego this month. That Amazon will begin collecting sales tax in D.C. is a “sure sign” that it is looking to open another bookstore, the Washington Post, a paper owned by Amazon founder Jeff Bezos, reported. A bookstore is a more likely option than a distribution center since Amazon has distribution facilities in Baltimore, according to WTOP.com.
Mayor Muriel Bowser told WTOP that she would be happy if Amazon opened a bookstore in D.C. “The District would be pleased to welcome Amazon’s storefront to the city,” she said. “Not only is it a sign of the District’s vibrant retail market, it would also provide residents and visitors with another new retail option.”
Since it does not seem possible that Amazon would be able to open the store by October 1, WTOP speculates the date stems from the online retailer’s negotiations with the District, which begins its fiscal year on October 1.
In September 2015, independent bookstores in the nation’s capital urged Mayor Bowser to level the playing field for Main Street retailers by requiring remote sellers such as Amazon to collect and remit sales tax. In a letter dated September 10, ABA member stores in Washington, D.C., stressed, “Businesses like ours remain at a significant competitive disadvantage because large, remote retailers such as Amazon are skirting their responsibility to collect and remit sales tax to Washington.” The booksellers asked the mayor to clarify tax law to ensure that all retailers in Washington “play by the same rules.” There was no response from the mayor’s office to the letter.