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Amazon to collect South Dakota, Wyoming sales taxes

The online sales tax list for the world's largest online retailer gets longer.

Amazon will start collecting state sales taxes on shipments to South Dakota on Feb. 1 and to Wyoming on March 1.

Amazon packages on doorstep

If, however, you buy from other online vendors who ship to those states, your bills might not contain a sales tax charge. The deals each state struck with Amazon and announced this week are specific to that company only.

Wyoming tax law in the works: While the decision by the Seattle-based online giant to start collecting sales taxes is welcomed by officials in South Dakota and Wyoming, the states are depending on legislative actions to expand the sales tax collection responsibilities to all remote retailers.

"Wyoming businesses are at a disadvantage when internet businesses fail to collect tax," Wyoming Gov. Matt Mead said in his Jan. 12 announcement of the Amazon tax collection deal. "This is an important step in the right direction. I encourage the Legislature to continue to work on the remote seller's bill."

The bill to which Mead referred is H.B. 19, which has been prefiled in the Wyoming legislature. It would require a remote seller to remit tax when its gross revenue from in-state sales exceeds $100,000 or it makes 200 or more separate sales into the Cowboy State.

South Dakota law passed, now in court: The Wyoming bill is similar to the South Dakota law that took effect last year. That measure requires remote sellers with no physical location in the Mount Rushmore State to collect and remit sales tax on online purchases.

That legislation deliberately conflicts with federal law, noted South Dakota Gov. Dennis Daugaard, in order to force the legal challenge to it that is now working its way through the courts and, it is hoped, come up with a definitive answer regarding the current nexus requirement.

Nexus, or a physical presence, is the standard set for remote sellers and out-of-state tax collections in 1992 by the U.S. Supreme Court's decision in Quill vs. North Dakota.

Yes, the prevailing sales tax collection law for out-of-state sellers was set by South Dakota's neighbor. And yes, it soon might be supplanted.

"This is not a new tax. It is an issue of tax uniformity," said Daugaard of his state's remote sales tax law. "If South Dakota retailers must collect sales taxes, their online competitors should as well."

As South Dakota (and other states) wait for the final word from the courts, Daugaard welcomed the Amazon deal. It is the latest in a series of agreements his state's Department of Revenue has reached under the new law with online retailers to voluntarily remit sales tax. For those who did/do not register, an injunction bars enforcement of the provisions until the litigation is resolved.

"Thanks to the Department’s efforts, 101 online businesses without a physical presence in our state are voluntarily collecting sales tax from their customers and remitting those dollars," Daugaard said in his announcement of the Amazon deal.

Amazon collecting in 36 jurisdictions: The impending sales tax collection in South Dakota and Wyoming brings to 36 the number of taxing jurisdictions where Amazon will be collecting sales levies.

The table below shows the full list of 35 states (and Washington, D.C.) where Amazon will be collecting sales taxes in a couple of months.

Alabama  Indiana  Nebraska South Dakota 
Arizona  Iowa  Nevada  Tennessee
California  Kansas  New Jersey  Texas 
Colorado  Kentucky  New York  Utah 
Connecticut Louisiana  North Carolina  Virginia 
District of Columbia  Maryland  North Dakota  Washington 
Florida  Massachusetts Ohio  West Virginia 
Georgia  Michigan Pennsylvania Wisconsin
Illinois Minnesota   South Carolina  Wyoming 


Since 5 states don't collect a state-wide sales tax, that leaves just 10 states where Amazon customers -- and, in some cases, other cyber shoppers -- won't see sales taxes added to their online invoices.

The still Amazon tax free states, for now, are Arkansas, Hawaii, Idaho, Maine, Mississippi, Missouri, New Mexico, Oklahoma, Rhode Island and Vermont.

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Comments

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ray woods

Amazon doesn't collect all the Mr Matt last time I vote for this so called gov

Kay Bell

Jim, you need to check with your state's tax department as to the specific sales tax collection rules for Amazon and/or other online vendors, including resellers.

jim

we use amazon for purchases for products we resell. Is there a exemption for businesses who resell amazon products.

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