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Amazon having issues with the states on sales tax collection
Posted by: Curtis Stevens on November 19th, 2009

Amazon is having issues with a few states when it comes to collecting sales tax.  Since they are selling on the Internet, you now have interstate commerce.  Many ecommerce merchants find themselves with this dilemma and issue to work out.  Which states do you collect sales tax from?  Only from the states you operate in, such as warehouses, operations, etc?  Or do you only worry about the state where you are headquartered and doesn’t matter if you have some fulfillment center in another state.  Another thing you must consider, is you will also pay credit card processing charges on the sales tax amount as well, but that doesn’t amount to much unless your volume is huge. They say state and local governments lose more than 7 billion in revenue each year because of the 1992 courts decision that states the merchant must have a physical presence in the customer’s state.

I personally think it would be a bad idea if this were ever to be overturned. I think consumers would think twice about buying as much online. That has always been a big selling point, no sales tax and a big convenience of ordering without ever leaving your house. If this were to change, it would definitely change the landscape some.



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