Amazon to Start Collecting Sales Taxes in Every Applicable State

Chris Gaetano
Published Date:
Mar 30, 2017

Online retail giant Amazon plans to begin collecting sales tax in Hawaii, Idaho, Maine and New Mexico, the last four states in which it did not already do so, according to CNN Money. Amazon, for many years, had been able to avoid responsibility for sales tax collection because, in general, it didn't have any physical presence in their customers' states. However as Amazon has expanded, it has built more and more distribution centers that have been sufficient to establish nexus, and therefore sales tax liability. This has led to a rapid growth of states where it is obligated to collect taxes: CNN noted that it collected sales taxes in 29 states and Washington D.C. by the end of last year, and has so far added four more. As of April 1, Amazon will be collecting sales tax from all 45 jurisdictions that have a statewide sales tax.

Excluded will be Delaware, Montana, New Hampshire and Oregon, which have no sales taxes at all, and Alaska, which has sales tax only on a municipal level. Further, the change only affects purchases directly from Amazon. It will not collect sales taxes on purchases from third party affiliates. 

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