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Wal-Mart skirts online tax, despite supporting it

August 30, 2011 12:00:00 AM PDT
A mixed message from retail giant Wal-Mart: The company has led the attack against retail rival Amazon.com, which is fighting a California online sales tax. Now Wal-Mart says it can't always ask online consumers to pay the tax.

Wal-Mart is at the forefront of attacking Amazon.com, which refuses to collect the state sales tax on Internet purchases. But Wal-Mart hasn't exactly come clean.

With Wal-Mart as a major financial backer, local business-owners and Democrats calling themselves Stand with Main Street denounced Amazon's effort last month to overturn California's new online sales tax law through a referendum.

It turns out that even though it wants the online sales tax enforced, Wal-Mart's website doesn't always collect the sales tax.

Walmart.com, which is based near the San Francisco airport, sells numerous items from a third party: Boston-based CSN Stores.

The transactions take place on Walmart.com, but the sales tax isn't collected from California customers.

CSN Stores even touts online one of the best things about buying from its website is it doesn't have to charge the sales tax.

"One of the best things about buying through CSN Stores is that we do not have to charge sales tax," it says on the CSNstores.com site.

State Senator Loni Hancock (D-Oakland) led the push on the online sales tax and believes Wal-Mart should be adding it.

"The state Board of Equalization needs to collect the sales tax that is owed this state from any company that isn't paying it," said Hancock.

Neither "e-tailer" returned emails for comment, but a Wal-Mart spokesman told the Los Angeles Times its online arm doesn't have to collect the sales tax unless the vendor tells them to.

"I'm not defending Wal-Mart, but I think it goes to show you what lengths California businesses will go in order to compete with Amazon," said state Assemblyman Charles Calderon (D-Montebello)..

Despite the controversy, the campaign to fight Amazon and keep the online-sales-tax law intact wouldn't turn away Wal-Mart's deep pockets.

It's a bitter pill for shop owners.

"I don't see Wal-Mart as being on my side or caring about the brick-and-mortar shops at all," said Lauren Lundsten, a store owner.

Democrats are pushing another version of the Amazon tax through the Legislature, but this time with a two-thirds vote. Laws passed with a two-thirds majority cannot be overturned through the referendum process.

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