"Alibaba Threat" Behind The Electricity Supplier Tax Problem

Recently, several large US retailers have warned that if the US Congress does not plug tax loopholes, the Chinese electricity supplier Alibaba may "destroy most of the US's local retailers".

This shows us retailers are nervous about Alibaba's potential competition from e-commerce enterprises in developing countries.

However, Alibaba's production and sales business is mainly China. It is a typical localization company. For the US market, sales are mainly through "Global Express", but the scale of business is very small.

The reason why Alibaba's business scale is so huge is that the price and quality of Chinese retail products are hard to satisfy. This also spawned purchasing agents and Hai Tao business, that is, importing goods from overseas to China on the platform of electronic business. It is hard to imagine that Americans will buy Chinese electronic products or clothes in Alibaba, and even Taobao has no English page.

Why is the fair Street composed of many large chain retailers in the United States attacking the Alibaba? First, they mainly promote the legislative process of the United States taxation of the power grid by attacking Alibaba. Secondly, they threaten the legislators with such giants as Alibaba. If they do not levy taxes, if China's Alibaba invades the US market, the entity chain stores will suffer a devastating blow, which is actually based on the alternative "China Threat Theory".

Because the legislation of "net shop taxation" will enter a crucial voting period this month, Alibaba belongs to "lying in the middle of a gun".

According to a decision of the US Supreme Court in 1992, if online retailers do not have physical facilities in a state, such as warehouses or distribution centers, the state government shall not force online retailers to impose sales tax on the residents of the state.

However, as more and more online retailers emerge, they are increasingly opposed to physical retailers.

Last year, the US Senate passed the bill of "net shop taxation" by 69 votes to 27.

This bill needs to be passed by the house of Representatives before it becomes a law. In December this year, it is a crucial period to decide whether or not this bill will be passed.

Those who support the bill argue that the tax exemption for Internet sales is unfair to physical retailers, and will hurt those SMEs. And those who oppose taxation also believe that taxes will affect the future of small businesses in the United States, because many entrepreneurs are rich by selling internet sellers with almost no threshold. Moreover, because of different tax systems and tax rates in the States, taxes will cause great distress to Internet retailers.

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Such a large online retailer has to pay taxes in accordance with the law, because many warehousing and distribution centers have been established in the states of the United States. Therefore, both sides of the game mainly talk about small and medium-sized enterprises, support taxes and pay more attention to fairness, while those who oppose taxation emphasize freedom.

This also reflects why the US electricity supplier is not developed. The US system guarantees fair competition for all kinds of interests, once the network sales pass.

When a discount threatens the retail business, the parties will play a game by influencing laws to ensure that it is a fair competition.

But in China,

It is almost a devastating blow to the physical retail industry. Although the B2C type of electricity supplier will pay taxes on a symbolic basis, the online shops on Taobao will not be taxed.

Because China's entity retailers not only have to pay higher taxes, but also have a high cost of warehousing and sales, their cost advantages have been greatly lost. This also leads to the trend that almost all goods in China are pferred to network sales, which is unfair to the entity retailers and constantly reduces the quality of commodities through price war.

Therefore, Chinese legislators are also responsible for maintaining the fairness of the competition. Although the electricity supplier represents a more advanced business model, fair game rules must be established as early as possible.