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Amazon Blamed for $1 Billion in Lost Tax Revenue in 2014

Amazon is frequently blamed for reducing tax revenue in states where it doesn’t collect online sales tax, but a new report points to another way the company could be hurting state and local government coffers: lost property taxes.

An organization called Civic Economics says in 2014, Amazon cost state and local governments $1 billion. It estimated that Amazon avoided paying $625 million in state and local sales taxes, and another $420 million in property taxes.

Here’s how it calculated the latter figure. Civic Economics estimated that Amazon sold $44.1 billion worth of retail goods nationwide – “These sales are the equivalent of 3,215 retail storefronts or 107 million square feet of commercial space, which might have paid $420 million in property taxes.”

Amazon also has a negative impact on American jobs, the organization said:

“Amazon also operated 65 million square feet of distribution space, employing roughly 30,000 full-time workers and 104,000 part-time and seasonal workers. Even counting all the jobs in Amazon distribution centers, Amazon sales produced a net loss of 135,973 retail jobs nationwide.”

Amazon declined to comment on the study, which was released in a report called “Amazon and Empty Storefronts” on January 24 at a meeting of the American Booksellers Association, a longtime partner.

In the introduction to the report, the organization writes, “The American Booksellers Association and Civic Economics have long collaborated to study and describe the state of independent retail in America, but until now those efforts have focused on various classes of bricks and mortar stores. This report takes that research into a new era. It is designed to provide policymakers and consumers with a better understanding of the impact at the state and local level of the growth of online retail as a substitute for storefront purchases.”

Part of its conclusions: “This study should not be read as tilting at the vast windmill that is Amazon. As with the big box stores that preceded it, individuals and communities are likely prepared to accept tradeoffs for the convenience that Amazon offers. We do not believe, though, that Americans yet comprehend the nature of the tradeoffs to come.”

You can find the report, which include its methodologies, on the Civic Economics website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.