"We applaud the Trump Administration for taking decisive action against France and for signaling to all of America's trading partners that the USA government will not acquiesce to tax and trade policies that discriminate against American businesses", Amazon said in a statement to The Washington Post.
"For us, [the tax] is totally compliant with worldwide agreements". The administration says it could invoke the same 1970s-era laws it used to slap tariffs on imports from China and other trading partners, including traditional US allies.
Conservative government minister Jesse Norman said the tax would ensure "large multinational businesses pay their fair share towards the public services we rely on".
The lawmakers included a suggestion to use a section of the tax code that would double the rate of USA taxes on French citizens and companies in the U.S.
U.S. authorities have criticised the EU's plans to introduce a "digital tax, ' describing the measures as 'discriminatory" in a letter penned to European Council president Donald Tusk and Commission President Jean-Claude Juncker, at the close of last week's EU summit.
But French Economy Minister Bruno Le Maire France rejected the U.S. reaction today, saying "threats" were not the way to resolve such disputes. Finance minister La Maire reckons that, once in place, the new digital tax will raise up to 500 million euros ($565 million / £449 million) per year. The U.S trade official said it would wait and welcome a multilateral agreement on taxes in the digital economy as committed by OECD.
The French digital services tax would impose a 3% annual levy on French revenues of digital companies with yearly global sales worth more than 750 million euros ($844 million) and French revenue exceeding 25 million euros.
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"The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies", said US Trade Representative Robert Lighthizer.
France's proposed digital services tax - which Senators nodded through on Thursday - would slap a 3pc charge on the turnover of digital companies with revenues of over 750m euros globally and 25m euros in France.
Nonetheless, a technology industry lobby group, ITI, urged the USA not to resort to tariffs.
The investigation could spark other countries to tax tech giants following belief the United States companies aren't paying enough tax worldwide.
The U.S investigation against France could be a prelude to imposing tariffs or trade restrictions on French goods.
The French have reacted angrily to the news of the investigation and said it was free to decide how it applies taxes as a sovereign country.
"Between allies, we can, and we should, solve our differences without using threats", French Finance Minister Bruno Le Maire said in defense of the measure just ahead of the final vote in the French Senate. They avoid paying tax and even if they pay it will be in those European Union countries where they have set up offices.