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Amazon Taxes Expand In January 2014

  • Dec 12, 2013 | Gail Cole

 Shoppers in Indiana, Nevada and Tennessee will be done come January 1, 2014, when Amazon starts collecting sales tax in those states.

On January 1, 2014, Amazon.com will begin collecting sales tax in Indiana and Nevada and Tennessee.


Amazon agreed to collect sales tax in Indiana back in January 2012. Governor Mitch Daniels (R), standing alongside Amazon’s Vice President of Global Public Policy Paul Misener, said he was very glad “to announce that the state of Indiana and Amazon have reached agreement… for Amazon to begin collecting sales tax in Indiana effective 2014 or at the passage of federal legislation if we succeed in achieving that between now and then. Indiana becomes just the fourth state to reach such an agreement and it is as good as any other state’s agreement.”

Indiana may have been the fourth state to reach an agreement with Amazon but it will be almost the 20th to actually add Amazon sales tax revenue to its coffers. Since the announcement in January 2012, Amazon has begun collecting sales tax in many states, including California, Connecticut, Massachusetts, Pennsylvania, Texas, and Wisconsin. Seeing this, several Indiana lawmakers sought to press Amazon into collecting sales tax last July, six months before the agreed-upon start date of January 2014. Not wanting to go back on their word to Amazon, the state decided to stick with the original agreement.


The world’s largest etailer reached an agreement with Nevada Governor Brian Sandoval (R) in April of 2012. At the time, the governor thanked Amazon “for creating jobs and investment in Nevada.” He also stressed the continued need to “push Congress to act on legislation that will allow states to collect revenues that are already due” and said they were “grateful the company is working with us on a federal solution.”

Amazon’s Paul Misener, Vice President of Global Public Policy, also spoke of a federal solution. He said, “Amazon appreciates Governor Sandoval’s focus on Nevada jobs and his efforts to encourage Congress to resolve the sales tax issue this year.”

Both Misener and Sandoval were referring to 2012 legislation similar to the Marketplace Fairness Act of 2013--federal legislation that would grant states the right to require certain remote retailers to collect sales tax provided the states simplify their sales tax laws.

Sandoval and Misener sounded hopeful in April 1012. However, no federal solution to the problem of online sales tax has been enacted to date.


Shoppers in Tennessee are relishing the last days of tax-free online shopping this holiday season. An October 2011 agreement between Governor Bill Haslam (R) and Amazon established that the online retailer would begin collecting Tennessee sales tax in January 2014. The online behemoth committed to expand its presence in Tennessee, creating 3,500 full time jobs (with benefits) and thousands of seasonal jobs.

When announcing the agreement, the governor stressed this would not be a new tax: “Let me be clear. This isn’t about new taxes. This is about how we collect sales tax in Tennessee.” Currently, Tennessee shoppers are responsible for submitting to the Department of Revenue use tax on untaxed online purchases; Amazon even reminds Amazon shoppers to pay use tax.

Like the governors of Indiana and Nevada, Governor Haslam also referenced a federal solution. He suggested one might be found prior to 2014. It could have happened. In May, the Senate approved the Marketplace Fairness Act of 2013. Yet it has been gathering dust in Congress and is unlikely to be passed before January 1, 2014.

However, sales tax changes do happen--frequently. Is your business prepared for them?

photo credit: soumit 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.