Amazon Taxes Expand In January 2014

Shoppers in Indiana, Nevada and Tennessee will be done come January 1, 2014, when Amazon starts collecting sales tax in those states.

Shoppers in Indiana, Nevada and Tennessee will be done come January 1, 2014, when Amazon starts collecting sales tax in those states.

On January 1, 2014, Amazon.com will begin collecting sales tax in Indiana and Nevada and Tennessee.

Indiana

Amazon agreed to collect sales tax in Indiana back in January 2012. Governor Mitch Daniels (R), standing alongside Amazon’s Vice President of Global Public Policy Paul Misener, said he was very glad “to announce that the state of Indiana and Amazon have reached agreement… for Amazon to begin collecting sales tax in Indiana effective 2014 or at the passage of federal legislation if we succeed in achieving that between now and then. Indiana becomes just the fourth state to reach such an agreement and it is as good as any other state’s agreement.”

Indiana may have been the fourth state to reach an agreement with Amazon but it will be almost the 20th to actually add Amazon sales tax revenue to its coffers. Since the announcement in January 2012, Amazon has begun collecting sales tax in many states, including California, Connecticut, Massachusetts, Pennsylvania, Texas, and Wisconsin. Seeing this, several Indiana lawmakers sought to press Amazon into collecting sales tax last July, six months before the agreed-upon start date of January 2014. Not wanting to go back on their word to Amazon, the state decided to stick with the original agreement.

Nevada

The world’s largest etailer reached an agreement with Nevada Governor Brian Sandoval (R) in April of 2012. At the time, the governor thanked Amazon “for creating jobs and investment in Nevada.” He also stressed the continued need to “push Congress to act on legislation that will allow states to collect revenues that are already due” and said they were “grateful the company is working with us on a federal solution.”

Amazon’s Paul Misener, Vice President of Global Public Policy, also spoke of a federal solution. He said, “Amazon appreciates Governor Sandoval’s focus on Nevada jobs and his efforts to encourage Congress to resolve the sales tax issue this year.”

Both Misener and Sandoval were referring to 2012 legislation similar to the Marketplace Fairness Act of 2013–federal legislation that would grant states the right to require certain remote retailers to collect sales tax provided the states simplify their sales tax laws.

Sandoval and Misener sounded hopeful in April 1012. However, no federal solution to the problem of online sales tax has been enacted to date.

Tennessee

Shoppers in Tennessee are relishing the last days of tax-free online shopping this holiday season. An October 2011 agreement between Governor Bill Haslam (R) and Amazon established that the online retailer would begin collecting Tennessee sales tax in January 2014. The online behemoth committed to expand its presence in Tennessee, creating 3,500 full time jobs (with benefits) and thousands of seasonal jobs.

When announcing the agreement, the governor stressed this would not be a new tax: “Let me be clear. This isn’t about new taxes. This is about how we collect sales tax in Tennessee.” Currently, Tennessee shoppers are responsible for submitting to the Department of Revenue use tax on untaxed online purchases; Amazon even reminds Amazon shoppers to pay use tax.

Like the governors of Indiana and Nevada, Governor Haslam also referenced a federal solution. He suggested one might be found prior to 2014. It could have happened. In May, the Senate approved the Marketplace Fairness Act of 2013. Yet it has been gathering dust in Congress and is unlikely to be passed before January 1, 2014.

However, sales tax changes do happen–frequently. Is your business prepared for them?

photo credit: soumit via photopin cc

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2 Responses to Amazon Taxes Expand In January 2014

  1. Tina Smith says:

    I work for a public school system and we a tax exempt from state sales tax. We can not pay taxes. How to we indicate that we are tax exempt when ordering online from Amazon?

    • will says:

      Hi Tina,

      As you probably know, the rules for sales tax exemptions vary from state to state. If you have any questions about your exempt status, we recommend contacting the relevant state Departments of Revenue. That said, Amazon does have a tax exemption program that you can apply for (see below). You can go to https://CertExpress.Avalara.com to fill out the exemption certificate appropriate for your state, and then apply for the Amazon exemption program (and submit your certificate) here: https://www.amazon.com/gp/taxExemption

      Hope this helps! Please let us know if we can help in any other way.

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