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Amazon Collects Sales Tax In Four More US States

by Glen Shapiro, Tax-News.com, New York

05 January 2017


With Amazon agreeing to begin the collection of sales taxes on January 1 in four more US states – Iowa, Louisiana, Nebraska, and Utah – the online retailer is informing its customers that taxes are now charged on items shipped to 32 states.

Amazon has been increasing the number of states in which it agrees to collect sales tax, particularly where it is building new warehouses. However, it has also been fighting the imposition of the tax on its online sales in many states, particularly those where it does not have a "physical presence."

Amazon's preferred solution would be for the US Congress to resolve the uncertainties still being caused by the 1992 "Quill" ruling of the US Supreme Court (SCOTUS) that established the physical presence test, where retailers are only required to collect sales tax in states where they also have bricks-and-mortar stores. It was also then decided that only Congress has the authority to regulate interstate commerce under the Commerce Clause of the US Constitution.

However, as Congress continues to be inactive in this respect and SCOTUS has refused, so far, to take up a reconsideration of Quill, states have been making a concerted push to collect taxes on internet purchases.

Amazon has now agreed to collect Iowa's six percent sales tax on online purchases by Iowan residents from January 1, 2017. In addition, from the same date, Amazon started to charge the five percent, 5.5 percent, and 4.7 percent state sales tax on purchases sent to Louisiana, Nebraska, and Utah, respectively. Arrangements may also be made with regard to local sales taxes.

Amazon now informs its customers on its website that items shipped to 32 states are subject to the collection of sales taxes. These include Alabama, Arizona, California, Connecticut, District of Colombia, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, and Wisconsin.

TAGS: tax | sales tax | commerce | internet | e-commerce | tax rates | United States | retail

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