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Amazon to collect Missouri and Mississippi sales tax, February 2017


 Missouri and Mississippi are the latest states to announce that Amazon will soon collect and remit tax.

State by state, ecommerce giant Amazon is expanding where it collects and remits sales tax. In January, it added Iowa, Louisiana, Nebraska, and Utah to the list. Earlier this month, it announced that it would collect tax in South Dakota, Rhode Island, and Vermont as of February 1, 2017. Now comes the news that it will apply tax to Missouri and Mississippi sales starting February 1. Wyoming is next, beginning in March.

The statement released by Amazon spokeswoman Jill Kerr about Missouri was short and to the point: “Amazon will begin collecting sales tax in Missouri on Feb. 1, 2017.” Kerr offered no explanation as to why. Officials from some of the other states where Amazon recently began collecting tax, such as Utah, have described Amazon’s actions as “voluntary.”

It was Mississippi Department of Revenue Commissioner Herb Frierson who announced that Amazon would collect Mississippi tax as of February 1, 2017. He explained that the department has been developing a new “administrative process” and intends to start asking online vendors that make at least $250,000 of sales in Mississippi annually to collect and remit Mississippi tax. Those that voluntarily agree to do so will be rewarded, he said, because “we won’t go back and do a three-year audit on them.” Frierson added that he hopes “Amazon causes other people to want to do this. It’s the painless way of getting it done.” He expects Amazon to add between $15 million and $30 million to the state’s annual tax revenue (The Clarion Ledger). Governor Phil Bryant praised Frierson for his leadership and Amazon for its decision to voluntarily collect.

Amazon doesn’t currently have a substantial physical presence in Missouri or Mississippi, so it isn’t required to collect tax on transactions in those states. The company severed ties to Missouri affiliates in 2013, after the state enacted an affiliate nexus law, as its ties to the affiliates would have triggered a tax collection obligation.

As of this writing, Amazon’s Associate’s Program operating policies still ban residents of Missouri from participating in the program. However, the company has removed other states from the blacklist once it started collecting the state’s tax (e.g., Louisiana). If it adopts a similar policy moving forward, it will likely allow Missouri residents to participate once again.

Where will Amazon next collect tax?

Given that five states don’t have a general sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon), there are only six states where Amazon doesn’t yet collect (or hasn’t announced it will collect) tax: Arkansas, Hawaii, Idaho, Maine, New Mexico, and Oklahoma. Which state will be next? Cast your vote in the comments below.

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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.