Amazon will start collecting state sales taxes nationwide starting April 1 after those governments complained for years about losing revenue to the Internet retail giant.
The move adds Hawaii, Idaho, Maine, and New Mexico to the states where Amazon will collect state sales taxes, after other states were added earlier this year, CNBC noted. Amazon will not collect state sales taxes in Alaska, Delaware, Oregon, Montana, and New Hampshire because they don't have sales tax levies.
The National Conference of State Legislatures said its members lost $23.3 billion in revenue in 2012 due to their inability to collect sales taxes from online purchases, CNBC noted. Amazon, the biggest e-commerce business, will collect state sales taxes for all entities that have them.
"Today's decision by Amazon is welcome news to Maine retailers and consumers," said George Gervais, Maine's Department of Economic and Community Development commissioner said in a statement. "Maine businesses can go toe-to-toe with the very best out-of-state companies, provided they are competing on an equal playing field.
"Amazon's decision to collect and remit sales tax to the State of Maine is an important first step in leveling the playing field. … Now, more than ever, improving Maine's business competitiveness is of vital importance to growing our economy for all Maine people."
Amazon, founded in Seattle by Jeff Bezos in 1994, reported revenues of $107.01 billion in 2016, but Forbes magazine wrote that the internet giant is not crazy about the added expense of collecting sales taxes for states.
"Retailers don't love the rule because it's more work for them," said Forbes writer Kelly Phillips Erb. "Figuring sales tax in multiple states and localities can be complicated and expensive. So, for years, online retailers like Amazon have largely railed against an expansion of sales tax to the internet while brick and mortar stores have argued for expanding the tax, claiming it would level the retail playing field."
A 1992 lawsuit, Quill Corp. v. North Dakota, ruled that companies with a physical presence in a state can be required to collect sales taxes there.
Money magazine wrote this week that New York Gov. Andrew Cuomo is calling for internet retailers like eBay, Etsy, and similar online marketplaces to be made to collect state and local sales tax. Proposals are in the works for New Mexico and Rhode Island.
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