Have you looked at Amazon’s sales tax requirements page recently? If you haven’t, don’t!
If you think I’m exaggerating you’ve obviously not attempted to ascertain whether your purchase from Amazon.com falls within their prescribed formula. A direct quote from their section titled “determining applicable sales tax” states, “The amount of tax charged on your order will depend upon many factors including Identity of the seller, type of item purchased, and destination of the shipment. Factors can change between the time you place an order and the time of credit card charge authorization, which could affect the calculation of sales taxes. The amount appearing on your order as Estimated Tax may differ from the sales taxes ultimately charged.” Huh?
If you’re not scratching your head at this point in complete bewilderment, then I’d suggest you immediately contact Mensa and notify them you’ll be waiving their admission test.
There is a little bit of clarity, in all this murkiness, when it comes to states that already withhold sales tax for Amazon purchases. They are Kansas, Kentucky, New York, North Dakota, Texas and Washington. There are also many more contemplating similar laws, notably California and Pennsylvania will join the states that have already clambered onto the state sales tax wagon. These two states will climb aboard in September, 2012.
The battle between brick-and-mortar stores and their online retail cousins has been anything but civil. But, there seems to be a change in the air. Amazon.com, without outright stating this, seems to be spear-heading a distinctive new mantra. Instead of tenaciously fighting struggling deficit-weary states, Amazon.com seems to be mercifully brokering deals with state governments.
Analysts suggest the reason for Amazon.com changing its tune is because Amazon’s business model is rapidly changing. Instead of spending their time bickering over whether Amazon maintains a distribution center that qualifies as a true physical presence, Amazon seems to have opted for compromising on the once hot-button sales tax issue in order to grasp their new goal – opening more distribution centers around the country.
Historically, Amazon has complained that the collection of state sales tax, in its current form, is too complicated and tedious. They’ve long supported federal legislation that has attempted to make the collection of state sales tax more straightforward and painless. Amazon supports the latest federal proposal – Marketplace Fairness Act – and this appears to be making bipartisan headway.
This new bill asserts that a state can choose whether to enforce the collection of its state’s sales tax. And if they do, then the state should simplify its tax rules according to outlined parameters in the bill.
Amazon.com believes that, even if an online sales tax becomes a national reality, their sales will only be minimally affected. Traditional businesses hope that this potential minimal sales change, for online giant Amazon.com, will prove far more profitable for their bottom-line.
This is just a basic overview and is not legal advice specific to your situation. If you would like to speak with Jonathan about your situation, please email him at jcw@eastbaybusinesslawyer.com or call him at 925-327-1019.
