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Wisconsin Looks Forward to Amazon Sales Tax Revenue

  • Oct 14, 2013 | Gail Cole

 Will Main Street Kenosha benefit from the new Amazon warehouse?

Back in August, 2013, it was reported that Amazon was planning to build a one million square foot distribution center in Kenosha, Wisconsin. At the time, Amazon did not confirm or deny the report, saying through a spokesperson, “We have a longstanding practice of not commenting on rumors or speculation.”

Now the rumor has been Wisconsin Department of Revenue that “it will register with the state and obtain a seller’s permit by Nov. 1, when it will begin collecting sales tax from state residents who make purchases on Amazon.com.” Estimates predict that revenue generated from Amazon sales could be as much as $30 million per year. That will be a welcome addition to the Wisconsin budget.

Amazon collects sales tax in states where it has a physical presence (such as a distribution facility) and therefore nexus. It has fought collecting sales tax in states where it does not, such as New York and Maine. It has reached agreements with other states—like Nevada--wherein the online retailer promises to build a facility in the state and the state allows Amazon to delay sales tax collection.

Why dance with Amazon?

An Amazon distribution facility or warehouse means jobs. The Kenosha facility is expected to employ roughly 1,100 people: approximately 850 would make about $13 / hour fulfilling orders for customers; and the remaining 250 would be computer programmers, managers and technicians with annual wages ranging from $50,000 to $250,000 per year. Those jobs are the reason a state would court Amazon, and even allow the retailer a grace period before requiring it to collect sales tax.

Where does your company have to collect sales tax? Are you sure?

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
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.