Amazon Holiday Shoppers in Some States See Sales Tax for First Time

Residents in California, Texas and Pennsylvania should be aware: If you’re shopping on Amazon.com this holiday season, look out for a sales tax.
In September, Amazon.com consumers in California started paying local and state sales taxes as the online giant started collecting up to 10 percent for each order in that state.
California became the eighth state to force Amazon, the largest online retailer, to collect sales taxes, even in those states where Amazon operates warehouses. California’s sales tax on Amazon orders is projected to draw $83 million in its first year.
Residents of Texas and Pennsylvania also are seeing sales taxes. Amazon is set to begin charging online sales tax in New Jersey and Virginia next year, and in Indiana, Nevada and Tennessee in 2014.
The reason for the backlash on sales taxes against Amazon? Big retail chains – such as Wal-Mart and Target – have been lobbying in support of a federal sales tax bill on online transactions. Under federal law, online retailers do not have to collect sales taxes from buyers, unless the company has a physical presence, such as an office or store, in that state.
Other states are pressing Amazon.com to begin collecting sales taxes next year, arguing that the federal exemption on taxing online purchases is no longer valid.
Amazon’s share of online commerce is estimated at 20 percent and growing. But the online retailer anticipates another record holiday shopping seasons, saying that consumers are undeterred by sales taxes.
“As analysts have noted, we offer customers the best prices with or without sales tax,” said Scott Stanzel, an Amazon spokesman, as quoted by Politico. “We collect sales tax or its equivalent in more than half of the areas where we do business and we are pleased to say we are thriving in those geographies because Amazon offers low prices, vast selection and fast delivery.”
About 25 percent of online shoppers said they would go to a another retailer if a sales tax is charged, according to a 2011 study by Forrester Research.

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