Small Business News

Amazon To Collect Sales Tax In Three More States

Consumers in Indiana, Nevada and Tennessee will no longer get a free passon sales tax when shopping on Amazon.com. Starting today, residents in those states will join the 16 other states in the country that automatically pay tax on Amazon purchases. South Carolina is not far behind, consumers in the Palmetto State, will begin paying taxes on all purchases from the monster online retailer starting in 2016.

The three new state additions are expected to generate about $50 million a year in tax dollars. Amazon tried and failed to keep sales tax laws from expanding. Their argument has always been that since they are not a “brick and mortar” retailer, but instead an online presence, consumers who shop with them should not have to pay a state sales tax. In fact, that’s always been a huge advantage for Amazon. However, the company’s competitors brought their battle to court in an effort to try and keep up with the retail juggernaut.

This past December, the U.S. Supreme Court declined to hear Amazon’s appeal regarding a New York court ruling that required the retailer to collect sales tax in the state. That ruling will most likely serve as a precedent for future rulings. In other words, if you live in one of the 30 states where you currently are not required to pay a sales tax on Amazon.com purchases, enjoy it while you can.

Amazon’s strategy has always been about offering price-advantages for their customers. Sales tax varies from state to state, residents in Indiana and Tennessee pay a 7% sales tax. Residents in Nevada pay a 6.85% sales tax. However, do not think for a single second that Amazon is not finding new ways to differentiate its product and keep consumers coming back. Want same day delivery? How about Sunday delivery? How about delivery via drone? It’s all in the works as the retail giant keeps finding advantages in every possible nook and cranny imaginable.

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