Tags: amazon | sales | tax | collection

Amazon Sales Tax Collection in 3 States Kicks In With New Year

Thursday, 02 Jan 2014 07:33 AM

By Alexandra Ward

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Amazon customers in Indiana, Nevada, and Tennessee will now have to pay sales tax on purchases from the online retail giant in a move that's expecting to generate $50 million a year.

The website announced Wednesday that the new year marked the start of new policies on sales tax, bringing the total number of states required to fork over the levies to 19, according to the Wall Street Journal.

In general, court precedents have ruled that retailers must collect sales tax only in states where they have a physical presence, like a warehouse or a store. As Amazon has expanded its network of warehouses, a growing number of states have been roped into that requirement.

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But Amazon itself objects to collecting sales tax and believes it shouldn't have to as an online retailer. In December, the giant even appealed to the U.S. Supreme Court to reverse a lower court decision that ruled Amazon had to collect sales tax from New York customers. The Supreme Court declined to hear the case.

The company instead supports legislation that would implement a national online sales tax, which would replace the local and state taxes that some customers are subject to. That bill is currently pending in Congress.

South Carolina residents will have to start paying sales tax on Amazon purchases starting in 2016, WSJ reported.

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