For much of America, paying sales tax on your Amazon purchases is nothing new.
Yet in small states where the company didn’t have any business operations, Amazon had been a no-tax holdout. The company was not required to collect sales tax and did not do so for the longest time — but that’s about to change.
Taxes coming to your Amazon purchases in these states
Come April 1, residents in Hawaii, Idaho, Maine and New Mexico will be subject to sales tax on their Amazon purchases…and that’s no April Fool’s joke!
Once those four states join the tax roster, Amazon will be collecting sales tax in 45 of the 50 states.
2017 has so far been the year that Amazon expanded tax collection to a wide swath of states where it previously offered online shoppers an extended tax-free holiday.
On January 1, residents of Louisiana, Iowa, Nebraska and Utah began paying state sales tax on their Amazon purchases.
Residents in Mississippi, Missouri, Rhode Island, South Dakota and Vermont started paying tax on Feb. 1.
And on March 1, Wyoming residents got on board the Amazon tax train.
States are ecstatic with the move
Predictably, state legislators are widely pleased with the move because it will bolster their budgets. Rhode Island alone is expecting a $35 million boost in revenue from Amazon’s move, according to AP/ABC News.
Of course, it’s a different story for average customers in these states who have to suddenly start paying sales tax to Amazon. They aren’t as likely to be thrilled.
In case you’re curious, what did residents in these states listed above do before sales tax was collected by Amazon?
In theory, they should have tallied up all of their online purchases and sent estimated taxes based on that amount to their state. However, almost nobody actually did that.
As for Clark, he was a vocal early proponent of Internet sales tax as a way to level the playing field between online sellers and brick-and-mortar businesses.
These are the only states where Amazon still doesn’t collect sales tax
To be able to collect sales tax, Amazon must have some physical presence in the same state as a buyer. As the company builds more and more fulfillment centers and data centers, there are very few places anywhere in the world that don’t have some sort of Amazon presence!
Yet five states have no sales tax levies, so residents of these states will still be able to continue shopping Amazon tax-free for the foreseeable future.
That list includes Alaska, Delaware, Oregon, Montana and New Hampshire.
Find updates and the latest info on sales tax policy on Amazon’s sales tax page.