February 6, 2017

WE ARE ALL NEOCONOMISTS NOW:

The Week in Public Finance (LIZ FARMER | FEBRUARY 3, 2017, Governing)

Dealing With Amazon

This week, Amazon began remitting sales taxes on purchases made in five states: Mississippi, Missouri, Rhode Island, South Dakota and Vermont. Come March, Wyoming is scheduled to start receiving Amazon tax revenue as well. In fact, more than three-quarters of states and the District of Columbia now have some kind of agreement in place with Amazon to collect sales taxes.

Current law says that Amazon only has to remit sales taxes in states where it has a presence. But since California renegotiated a deal with Amazon to collect them in 2012, states have followed suit.

The Takeaway: Amazon previously had a reputation for resisting sales tax efforts. But over the past year, Amazon has notably changed its tune and is approaching governments on its own. Finance officers in states and D.C. report that it was Amazon who made the first move in proposing new sales tax deals. The deals now in place in roughly 39 states amount to millions of dollars in more revenue. In its first year of implementation, for instance, California collected $260 million from Amazon sales alone.

The company's new push to make deals comes at a time when states are mounting legal challenges to the current sales tax law prohibiting them from collecting on all online purchases. Louisiana Revenue Secretary Kimberly Robinson recently said the U.S. Supreme Court decision not to hear a challenge to a Colorado sales tax law is likely what spurred Amazon to collect in Louisiana. The law requires out-of-state companies selling products to Coloradans to tell them they are required to pay the state's 2.9 percent sales tax on their purchase. Robinson believes the ruling will prompt other remote retailers to do so as well.

Posted by at February 6, 2017 5:21 AM

  

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