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Saturday 13 March 2010

Despite the ubiquity of its Web presence and its affiliates, Amazon says it officially exists in only four states (Kansas, Kentucky, North Dakota and Washington) and that it therefore isn’t required to collect local taxes on its transactions in the other 46 states. That has allowed the company to sell goods at seemingly lower prices than local brick-and-mortar competitors, which in turn artificially tilts the market in Amazon’s favor. In recent years, New York, North Carolina, Hawaii and Rhode Island have woken up to the scheme, passing laws that explicitly apply their local taxes to online retailers. Now, with budget crises intensifying, even more states are pondering similar legislation. And so rather than simply accepting a level playing field, Amazon opted to make an example out of Colorado as a means of pre-emptive intimidation. This is politics at its most bare-knuckled—not surprising, considering it comes from Amazon CEO Jeff Bezos, a caricature of Information Age greed. David Sirota

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