April 1st: equal collection across the nation
I’ve written quite a bit about sales taxes and Amazon in this blog…I even have a category for it. 🙂
It’s been a tumultuous topic, with lawsuits and threats and compromises and back-and-forths.
The basic issue has to do with when you buy items from Amazon: do you pay sales tax at that point or not? If you don’t, would you have paid sales tax if you’d bought the same item in a local brick-and-mortar store?
As I say, it’s complicated. 🙂
States can compel organizations (like Amazon) which have a physical presence in their states (it’s called a “nexus”…it might be a building, but a sales force counts, too) to collect sales tax at the point of sale.
The way it’s been done has been very irregular in different states.
So, there were repeated attempts at the Federal level to standardize internet sales tax collection…which Amazon favored, so they weren’t dealing with thousands of different tax jurisdictions (in some places, like Alaska, it gets to the municipal level).
Well, due to a couple of things, as of April 1st 2017 (about a month from now), Amazon will be collecting sales tax in every applicable state in the USA. I say “applicable” because not every state has a statewide sales tax (Delaware, Montana, New Hampshire and Oregon don’t, and Alaska has that municipal tax instead).
One of the biggest things which has pushed this is that Amazon has been getting a physical presence in more places, and is probably looking to expand. Some of that is “fulfillment centers” (warehouses, although they are more than storage), and some of it is actual brick-and-mortars stores (including pop up stores).
I also think it seemed less likely that the Federal government was going to pass a major new regulation on commerce.
Does this mean you’ll suddenly start paying tax on Kindle books on April 1st?
Generally, states don’t collect sales tax on e-book sales (mine, California, doesn’t), which are seen as more of a contract than an item being sold. It does mean that if you buy a physical item from them you might, if its taxable. Kindle EBRs, like the Kindle Paperwhite (at AmazonSmile*) (which is $30 off for Prime members in the USA at time of writing) would usually be taxed.
Now, I do think this is a good thing for consumers. I’ve seen this really misreported, saying that consumers are going to start paying sales tax. I was very happy when Amazon started to collecting sales tax in California. Before that, I had to spend quite some time calculating what I owed for Amazon taxes on my state income tax each year.
In most cases, you probably (check with a tax attorney if you aren’t sure) owe something like a “use tax” if you don’t pay a sales tax at time of purchase.
Hypothetically, it wasn’t how much you paid…it was when.
Many people, of course, just didn’t pay that use tax on their income taxes…which potentially risked legal consequences, even though being caught was probably unlikely.
I’m happy to see this behind us, at least for now (things could always change).
What do you think? Are you surprised it happened without Federal action? Do you think this will encourage states to start taxing e-books? Will make this make a difference about where you shop? Feel free to tell me and my readers what you think by commenting on this post.
Just a quick comment on Samsung introducing the Galaxy S8 today: yowza! 😉 They’ve been having a tough PR (Public Relations) time lately, with an exploding device last year, and a scandal in the Executive office…but they still are way ahead of Apple in the iPhone marketshare. They’ll have to do a lot to recover…and this phone does a lot. There is a Kindle presence on the Samsung, so at least there’s a tie-in…but if it all works the way it’s supposed to work, it’s going to be significant new phone. If you want to read more, there’s a lot of information on the official site.
April Hamilton’s Love My Echo also has some interesting information about why this might be a bad time to buy an Echo… Love My Echo blog.
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All aboard our new The Measured Circle’s Geek Time Trip at The History Project!
* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. Shop ’til you help!
This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.