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Amazon tax expands to 3 more states

By Kay Bell · Bankrate.com
Thursday, January 2, 2014
Posted: 4 pm ET

Attention online shoppers in Indiana, Nevada and Tennessee. I hope you stocked up on your orders from Amazon before 2014 arrived.

As of Jan. 1, the online retail giant is collecting taxes on products purchased by residents of those three states.

That brings the number of states in which Amazon collects sales taxes to 19. The others are Arizona, California, Connecticut, Georgia, Kansas, Kentucky, Massachusetts, New Jersey, New York, North Dakota, Pennsylvania, Texas, Virginia, Washington, West Virginia and Wisconsin.

More state sales taxes coming?

Will shoppers in the rest of the United States see a sales tax line added to their Amazon and other online invoices in 2014? Possibly.

In the states where it has agreed to collect sales taxes, Amazon has expanded its physical presence, generally by building warehouses or distribution centers. Those structures provide the necessary legal nexus for states to demand tax collection.

In New York, however, where Amazon has no physical facilities, the Seattle-based company lost its bid to prevent the Empire State from requiring it to collect sales taxes on shipments. New York tax officials' justification is the Amazon affiliates who live in the state and receive commissions for their online links to the retailer.

Overstock.com had joined Amazon in seeking Supreme Court intervention to stop the law, but the nation's high court in December refused to hear the case, leaving the New York statute in effect.

In its appeal filings, Overstock had argued that the New York law "functionally abrogates the physical-presence requirement." Now in order to avoid the New York sales tax requirement, Amazon, Overstock and similar online sellers must end their affiliates programs.

Nationwide law pending in Congress

Online retailers also must keep an eye on Congress.

The Marketplace Fairness Act, which would require online sales tax collection across the United States, was approved by the Senate last year. The House Judiciary Committee chairman is seeking input on his seven principles for Internet taxation, indicating that chamber might move the legislation this year.

Do you shop online? Is it still tax-free in your state? Will your shopping habits change if nationwide collection of sales tax on online purchases is enacted?

And you do know that you're probably supposed to be paying use tax to your state for those tax-free online purchases, right?

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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and co-author of the e-book "Future Millionaires' Guidebook."

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21 Comments
Dizzy
January 06, 2014 at 5:44 pm

Amazon's loss. With the sales tax, now a lot of stuff is about the same or cheaper at Best Buy. I cancelled by Prime membership cause I wasn't using it enough.

Lee Johnson
January 06, 2014 at 3:09 pm

If you add the tax and then the shipping the price is higher than local stores and the business will return or the prices will go down. I personally get upset when they charge $12 to $15 to ship an item that will go in a large envelop and cost 90 cents in postage.

CCRich
January 04, 2014 at 6:55 pm

So what. I'm in MA and I still use Amazon. Since the brick & mortar stores were such cry babies I will happily pay the tax @ Amazon which I prefer to them anyway & out of spite. So there, nyah, nyah.

Jim
January 04, 2014 at 8:58 am

Sales taxes are counter productive to on line sales. Personally, I will not patronize any site that applies a sales tax.
If more buyers avoid on line taxing sites the loss of business will force them to close shop and derail the taxing of on line sales.

Kent
January 04, 2014 at 8:02 am

Too many options on Google search for the same items Amazon sells. I continually find as good options with no tax and free shipping. I will keep moving my business elsewhere.

Dave
January 04, 2014 at 7:52 am

Even if Amazon must collect taxes, it will still be cheaper. States will get their money, but still have to contend with losing tax revenue from jobs that are lost from brick and mortar stores having to cut back on hiring. I propose taxing only purchases of things that are not made in the USA. This would give states their tax revenue and Americans more jobs.

Richard Patten
January 03, 2014 at 4:34 pm

Donald, Avoiding state sales tax allows Amazon to underprice local stores and put them out of business. Local stores hire local people and keep money circulating in your state and local community-to your state and community benefit, including you. Buy local.

Joe
January 03, 2014 at 4:29 pm

States have the right to collect sales tax for product being sold and delivered in their states.I always wondered why I have to collect and send sales tax to the state for free.Think I should get an administration fee

brian allyn
January 03, 2014 at 4:14 pm

There is a simple way around it. When you are on the item page, look on riht side for more buying options and buy from a merchant listed. Make sure is not listed as fulfilled by amazon and you can avoid the tax. Also most local places now price match.

Donald
January 03, 2014 at 3:53 pm

I used to do a lot of business a year with Amazon but they stole 22 dollars from me and sent me two lying emails so I don't do business with them anymore. Their customer service is useless if you can even contact them. They're living on their past reputation and I think they will soon dry up and blow away. Won't bother me any. Bye Bye

I don't understand why Congress is always trying to take away what little money the public has. I guess greed has no limits or they are just so stupid they don't know how little money the average person has to spend.
Donald

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