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Amazon Now Collects Sales Tax in Connecticut, Massachusetts, Wisconsin

  • Nov 5, 2013 | Gail Cole

 Amazon now collects sales tax in three more states: Connecticut, Massachusetts and Wisconsin.

Amazon.com began collecting sales tax on purchases made by residents of ConnecticutMassachusetts and Wisconsin on November 1, 2013.

According to the Wall Street Journal, Amazon is now collecting sales tax from a majority of U.S. consumers--approximately 163 million. That's something, especially given that the online retailer has long done its best to avoid sales tax.

As of this writing, Amazon collects sales tax in the following 16 states:

  • Arizona
  • California
  • Connecticut
  • Georgia
  • Kansas
  • Kentucky
  • Massachusetts
  • New Jersey
  • New York
  • North Dakota
  • Pennsylvania
  • Texas
  • Virginia
  • Washington
  • West Virginia
  • Wisconsin

The three most recent additions seem pleased with the news:

  • Massachusetts expects to collect $36.7 million from Amazon taxes by June 30, 2014 (Boston Globe).
  • A spokesman from the Connecticut Department of Revenue has said, "For us, this is a big one; no one does more business on line than Amazon does."
  • Wisconsin is expecting to add $30 million annually from the Amazon tax.

Soft on sales tax?

Is Amazon going soft on sales tax? Florida, Indiana and Nevada will be the next states to benefit from Amazon sales tax. And the world's largest online retailer is actually lobbying for the Marketplace Fairness Act of 2013, federal legislation that would allow states to impose a sales tax collection requirement if they simplify their tax laws.

Yet elsewhere, Amazon is still fighting sales tax collection. It has taken New York State to court over its online sales tax, and it has severed relationships with affiliates in Missouri, Minnesota and Maine in order to avoid triggering affiliate nexus. It has even asked people who rent textbooks to not take those textbooks across state lines (in order to avoid triggering nexus).

Build, build, build

If Amazon's initial strategy was to avoid sales tax, it is now focused on expansion and "immediate gratification" (Seattle Times). As of the end of September, Amazon owned 96 fulfillment centers around the globe. The more warehouses it has, the faster it can fulfill orders. Customers are happier and will shop Amazon more frequently. Mike Roth, Amazon's Vice President of North American Operations, has pointed out that sales continue to rise. Said Roth, "We're very, very happy with the volume that we're seeing across the United States." This in spite of the fact that an increasing number of shoppers are paying sales tax on their purchases.

As an added perk, Amazon is sometimes able to exchange tax breaks or delayed sales tax collection for fulfillment centers and jobs.

Is your business prepared for sales tax changes?

photo credit: Raccatography via photopin cc

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.