When it was announced last year that retail giant Amazon would build a fulfillment center in Hillsborough County, Florida, it became clear that the retailer would one day collect Florida sales tax. Exactly when that day would be, however, was not revealed. Now it has been. Amazon will start collecting Florida sales tax on May 1, 2014.
For years, Amazon’s strategy was to avoid online sales tax, to the ire of many a state. Gradually, that policy has shifted to one of immediate gratification. The more fulfillment centers the company has throughout the country, the faster it can deliver products to customers. Same day delivery? Why not?
Amazon’s fulfillment centers create nexus–the physical connection between a business entity and a state that triggers a sales tax collection obligation. Amazon already collects (or has a scheduled start date to collect) sales tax in all states where it has fulfillment centers. The new distribution center in Florida, set to open later this year, made sales tax collection in Florida inevitable; yet until recently, both company and state officials were mum on when it would begin.
Florida is home to nearly 190 million people. With that many shoppers (many of whom shop online), the state could garner approximately $80 million a year in Amazon sales tax revenue.
Learn how an automated sales tax solution can facilitate online sales tax collection.