Wal-Mart's Growing Local Influence

Wal-Mart rang up $285 billion in sales and $2.3 billion in profits worldwide last year, and its customers and employees didn't do so badly either, said H. Lee Scott Jr., the company's president and CEO, addressing this year's ICSC Retail Real Estate World Summit in Istanbul.

Wal-Mart's economic power with municipalities is on the rise as cities and states continue to struggle with the collection of online sales tax. Some estimates place Wal-Mart's annual sales tax contribution as high as $2.9 billion.  In the meantime, Amazon.com blames its sagging profitability on new requirements to collect sales tax, a complaint echoed by many small businesses. Federated Department Stores estimates that it spends $5 million a year just to remain in compliance with all local sales tax statutes, distinct from sales tax actually paid out.

Wal-Mart Stores Inc. spokeswoman Cynthia Lin said that voluntarily collecting online sales taxes was the right thing to do. "Many states are struggling with tax revenue shortages that affect funding for everything from schools to fire and rescue. This is our effort to help customers and the states they live in," she said.