Amazon Shoppers In TX & NV To Be Taxed

AmazonAmazon inked agreements with both Texas and Nevada this week, agreeing to collect sales taxes on online orders placed from shoppers in those states.

The agreement with Texas included Amazon agreeing to bring 2500 jobs into Texas and ante up for $200 million in capital investments within the state. In exchange for that and agreeing to collect future sales taxes, Texas is agreeing to drop a demand for $269 million in back sales taxes they say the company owes.

Texas sales tax is 6.25 %, and Amazon will begin collecting at on July 1 of this year.

Earlier this week Amazon also agreed to begin collecting sales tax from shoppers in Nevada. The 8.1% sales tax will begin being collected on January 1, 2014.

Along with Texas and Nevada, Amazon is also collecting sales taxes from shoppers in Kansas, Kentucky, New York, North Dakota and Washington.

The new agreements are sure to increase the pressure on Amazon to sign deals with other states. It’s also likely to increase pressure on other major online retailers to pay sales taxes as well.

The online sales tax situation, in which online retailers do not normally pay state sales taxes in states where they do not have a physical facility, dates back to a 1992 Supreme Court decision that found that retailers did not have to collect sales taxes across state lines. According to NOLO, shoppers are actually supposed to pay the sales tax (called a ‘use tax’ in this case) to the state on their own. Of course, that is rarely actually done.

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Faroh Sauder has spent more than 30 years working as a journalist and educator. He has written on politics, international affairs, civil rights, and consumer education. Now mostly retired, Faroh continues to stay current on tech and consumer issues and reports on his interests here at News For Shoppers.