Most Americans Must Now Pay Sales Tax on Amazon Purchases

Most Americans Must Now Pay Sales Tax on Amazon Purchases Photo (cc) by Aurelijus ValeiĊĦa

Two weeks ago, Amazon raised its minimum purchase for free shipping to $35. But there’s more bad news for some customers.

“Laws that take effect in Massachusetts, Connecticut and Wisconsin Friday mean about 163 million Americans in 16 states will have to pay tax on their diapers, books and other goods on Amazon,” The Wall Street Journal wrote late last week. That’s a little more than half of the U.S. population.

Including those new additions, here’s the full list of states from Amazon itself:

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

Amazon has long fought against sales tax. The company hopes its challenge against New York’s sales tax rules will wind up in the U.S. Supreme Court, the WSJ says.

But a Supreme Court decision in 1992 allowed states where Amazon has a physical presence to require it to collect sales tax. As the company has expanded and built warehouses across the country for quicker delivery, states have pushed to get a slice of Amazon’s pie. Wisconsin expects to collect $30 million a year from Amazon, Reuters says.

The company does support a bill in Congress that would allow all states to require state sales tax collection by online retailers, whether or not they have a presence in a state. But that’s mainly “in order to level the playing field with e-commerce rivals who don’t have affiliates,” the WSJ says.

Amazon also probably sees this as a battle it’s losing. New Jersey and Virginia began requiring tax collection this summer, Bankrate says, while Indiana, Nevada and Tennessee will begin requiring it next year. In the next few years, South Carolina and Florida plan to require it, too.

The WSJ notes that a Wells Fargo survey of Texans last year found consumers didn’t change their buying habits based on a new sales tax. Anecdotally, that seems to be the case in other areas.

What about you? Will or would sales tax on Amazon goods deter you from shopping there? Comment below or on our Facebook page. (By the way, where Amazon doesn’t collect sales tax, residents are supposed to pay it themselves to their state. But it appears hardly anyone does.)

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