Amazon loses $31B after Trump targets them on Twitter over tax practices

Trump goes after Amazon over their third-party seller tax practices, but the courts are already looking into it.


March 30, 2018

President Trump continues to take shots at Amazon, in Twitter posts on Thursday, in which he accused Amazon of paying “little or no state taxes,” and of using the USPS as their “Delivery Boy.”

The tweets come a day after multiple sources reported that Trump is “obsessed” with Amazon and wants to “go after” the e-commerce giant — a report that caused Amazon’s shares to fall almost 5% and wiped out more than $31B in shareholder value in the process.

Amazon’s controversial tax practice

Amazon still doesn’t collect state sales taxes for their “third-party” platform sellers in most of the country, a model that makes up more than 50% of Amazon’s business, and in all fairness, is frustrating to more than just Trump.

Some retail competitors believe the third-party vendor policy gives the retail giant an unfair advantage, which may very well be true — Amazon reported a provisional tax expense of roughly $200m in US state taxes  last year, pennies against their $177.9B annual sales. 

The whole issue may get settled in court

In 1992, the Supreme Court ruled that states couldn’t collect sales taxes gathered by “mail-order catalog companies” unless they physically existed in a state. 

But, earlier this year, the Supreme Court agreed to listen to arguments over internet sales taxes after South Dakota and 36 other states argued that times have changed in the Amazon era. 

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