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Amazon To Collect Arizona Sales Tax


Online retail giant Amazon announced last Friday that it will collect and remit sales tax for "any goods sold to Arizonans" beginning February 1, 2013. In addition, the company has agreed to pay an undisclosed but nominal percentage of the outstanding $53 million tax bill in Arizona. Neither Arizona nor Amazon has revealed exactly how much Amazon will pay. 

The move will make Arizona the ninth state where Amazon and its subsidiaries collect and remit sales tax. California became the eighth state on September 15, 2012. Initially, the company will only charge tax on sales of physical goods. Digital goods and services, such as ebooks, will be taxed starting July 1, 2013.

Under a precedent set by the Supreme Court (Quill v. North Dakota) Amazon and e-commerce retail companies have long avoided collecting and remitting sales tax in states where they don't have a physical presence. Amazon does not have stores in Arizona, but it does have four warehouses there.

No one from the company or the state has yet revealed why Amazon agreed to collect and remit sales tax in Arizona at this time. It is clear, however, that the leading online retailer is moving towards, rather than away from, tax collection. The company is slated to start collecting tax in New Jersey and Virginia in 2013. In 2014, it will collect sales tax on purchases made in Indiana, Nevada, and Tennessee.

A spokesperson from the Arizona Retailers Association announced that while they would have liked to see Amazon start collecting taxes in time for the holiday season, they are "thrilled" with the news.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.