April 1st: equal collection across the nation

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. 🙂

Sales Tax

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?

Probably not.

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.

Join thousands of readers and try the free ILMK magazine at Flipboard!

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.

8 Responses to “April 1st: equal collection across the nation”

  1. Phink Says:

    All these years of not paying sales tax had me thinking I was living in high cotton. OK, I just deleted two paragraphs out of fear people would think I’m horrible. Now, to calm down.

    I am against this. I am so against this. It will hurt Amazon with me a little. I will be more tempted to get my pantry items at the brick and mortar store now. However, I do get 5% back at Amazon so that will have to be thrown into the mix. If I want a new Kindle and Best Buy has it why wait 2 days for Amazon to get it to me? I’ll just drive 25 minutes to Best Buy and have it in 30 minutes. Of course there is also New Egg for certain items. I don’t think they charge sales tax but am not certain. Am I supposed to report this on my Arkansas income tax form and pay it then? I have no idea and I don’t care to find out either.

    OK, I better sign off now as I’m getting fired up again LOL. I just deleted some more stuff. I better get off here. Have a great day everyone. Dang taxes. Boy I tell ya what. Those no good……uuuugggghhhh. I better go.

    • Bufo Calvin Says:

      Thanks for writing, Phink!

      Arkansas isn’t changing at all with this…the new four states are Hawaii, Idaho, Maine and New Mexico. I probably should have put that directly in the post.

      So, your experience won’t change…and since you don’t care to find out, I won’t tell you anything about Arkansas tax. 🙂 I’m not a tax attorney anyway, therefore it’s better that I don’t.

  2. Phink Says:

    Bufo, I know you love the Wizard of Oz series. Here is a link that talks about the original book. Is the original what you and most others read or is it different? Here is a link about it but warning to everyone. It does contain spoilers. If you have not read the original then you may not want to click on it.

    Link contains spoilers in original Wizard of Oz.


    • Bufo Calvin Says:

      Thanks for writing, Phink!

      I appreciate that link! While it’s written in inflammatory language, it’s reasonably accurate. 🙂 That’s part of why I tell people to start kids with the second book, The Marvelous Land of Oz. That doesn’t avoid all unpleasantness, by any means, but the rules have changed (reasonably), and there is a lot more humor. There is still violence and slavery (quite a bit of the latter), but there are also more fun elements.

  3. Man in the Middle Says:

    One service offered by tax authorities in both states I’ve lived in lately have offered a suggested amount to include for use tax, based on taxable income. Both places, I’ve found it simplest to just pay that amount. This year I thought I might not need to, since Amazon only failed to collect sales tax on third party vendors in other states, but after spending a while adding those up, I decided it was still simpler, and perhaps even cheaper to just pay the recommended amount of use tax.

    Presumably this April 1 change means I’ll no longer need to pay any use tax, as I don’t buy anything from out of state via anyone other than Amazon.

    • Bufo Calvin Says:

      Thanks for writing, Man!

      Yes, that’s true in some states…you can just pay what they suggest, which can save you some time. I don’t think the third-party situation is changing, unfortunately. This article covers it…and also has a nice “time lapse” map of Amazon collecting state taxes.


      Someone reading the article could easily conclude that they didn’t owe tax on their Amazon purchases before, rather than Amazon not collecting it before, which are two very different things…

  4. Karen Says:

    Hi Bufo, the blog again isn’t updating for me.

    • Bufo Calvin Says:

      Thanks for writing, Karen!

      Sigh. You are the second person to mention it. Letting Amazon know might help, although they said they were having glitches with blog delivery. I’ll check it out and let them know, too, if it isn’t fixed.

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