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Battle over Internet Sales Tax Heating Up

The state's retailers are gearing up for what could be an extensive and expensive political and public relations campaign to get lawmakers to start taxing items sold on the World Wide Web. 

If you buy a book from a local retailer, you pay the state's 6.6 percent sales tax. But there's no tax collected on that same book from Efforts by some lawmakers to at least partly close that loophole have faltered. Michelle Ahlmer, executive director of the Arizona Retailers Association, said she wants to convince the public -- and by extension, the legislators who represent them -- that's not right.

"How is that fair that your local store is under this obligation and this behemoth is not? Explain that. How can you justify that?" Ahlmer asks.

Not all of the opposition has been legislative. Gov. Jan Brewer has said if Internet sales are to be taxed, she wants a nationwide solution rather than having each state come up with its own plan. But Michael Hunter, the governor's tax expert, said there's a more practical reason Brewer does not want to tinker with the law: The Department of Revenue already has levied a $53 million assessment against the company for unpaid sales taxes.

"That is premised upon DoR believing that current law is adequate to have Amazon have a tax liability. So that process is in the works," Hunter said.

Amazon will not comment on possible legislation, with the company saying it believes the levy is unjustified.