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Chapter 18: Q. 19 (page 442)

Special interests do not oppose regulations in all cases. The Marketplace Fairness Act of 2013would require online merchants to collect sales taxes from their customers in other states. Why might a large online retailer like Amazon.com support such a measure?

Short Answer

Expert verified

All competitors are also taxed and amazon being a large company can absorb the taxes.

Step by step solution

01

Step1. Marketplace Fairness Act.

The Marketplace Fairness Act of 2013is designed to help and allow the state governments in collecting sales taxes from remote retailers who are not physically present in their state.

02

Step 2.  Reason.

Under the market fairness act, if the big online retailers wishes to expand then the taxes need to be collected from the consumers. Amazon being a huge company, welcomes such move as it would increase the burden of other small competitors and may force them out of business. On the other hand, Amazon can comparatively easily absorb the shocks like reduced demand and increased prices for the consumers as it has diversified products available and has a huge turnover.

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