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Donald Trump attacks Amazon, focusses on tax and shipping

Donald Trump attacks Amazon, focusses on tax and shipping

Amazon.com Inc shares fell as much as 7.4 percent on Wednesday, briefly wiping about $53.6 billion from its market value, after news website Axios reported that U.S. President Donald Trump is obsessed with the world's largest online retailer and wants to rein in its growing power.

"If Mr. Trump's point was that Amazon did not collect sales taxes - which are owed by the purchaser and collected by the retailer - it is true that the company once avoided doing so". He could also step up his support for allowing states to collect sales tax on third-party purchases from Amazon, or seek to have the Postal Service charge more to deliver packages.

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 USA state taxes a year ago, pennies against their $177.9B annual sales.

"And as a result, companies like Amazon can buy and sell good without having to pay basic retail taxes that your stores and your convenience stores and all the folks around, when you walk out of the studio over there and grab something, you have to pay".

Amazon so far hasn't taken the bait, declining to comment publicly on Trump's latest tweet.

The company - or more specifically its CEO Jeff Bezos - is a frequent target of the president.

But prevailing antitrust law in the USA focuses on harm to consumers, not raw market power.

He has also accused Bezos of using the Washington Post, which Bezos owns separately from his interests in Amazon, as a tool to build political influence and damage him personally.

The issue is still being disputed at the federal level, with the US Supreme Court set to hear oral arguments on April 17 in a case which could reverse a 1992 decision that only companies with a physical presence in a state are required to collect state sales tax.




It's well established that the online retail giant has grown at the expense of brick-and-mortar shops. Now the company charges sales taxes in the 45 states that have them and the District of Columbia. "Towns, cities and states throughout the US are being hurt - many jobs being lost!"

But despite Amazon's seemingly inexorable growth - including its buildup in groceries, entertainment and health care - there's very little the president or the federal government could do under current antitrust practices.

What about Donald Trump's claim that Amazon is a burden on the U.S. postal system?

Pennsylvania and Washington state have recently passed laws requiring Amazon to collect sales on items sold by third-party vendors. But its line of business for shipping and packages has been a bright spot in recent years, with revenue increasing by $2.1 billion, to $19.5 billion, in fiscal 2017.

Sources say Amazon had cut ties from the lobbying firms last Friday and in their place hired Paul Brathwaite of Federal Street Strategies LLC and Josh Holly of Holly Strategies Inc, both of whom have previously worked as outside lobbyists for Airbnb Inc and Oracle.

In his tweet, Trump also took aim at the company's use of the postal service is "causing tremendous loss", but that too is misleading.

Trump's claim that Amazon is to blame for the U.S. Postal Service's woes dates back to December, when he said via Twitter that Amazon's deal, which includes Sunday delivery via the regular mail, was making it "richer and the Post Office dumber and poorer".

In a 2017 statement, Amazon said that its partnership with the Postal Service was "reviewed annually by the Postal Regulatory Commission", which found its contracts to be profitable.

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