Amazon has announced it will start collecting Sales Tax in all states that have such a tax. The online retailer announced that they will start collecting it beginning April 1st. This means the remaining four states where shoppers aren't required to pay it via Amazon will start. The four states are New Mexico, Maine, Hawaii and Idaho.
Residents of some states won't have to pay sales tax to Amazon. Those states are New Hampshire, Alaska, Montana, Delaware and Oregon. All of those states do not have a state sales tax.
Maine retailers can go toe-to-toe with Amazon
George Gervais is from the Department of Economic and Community Development in Maine. He welcomed the announcement by Amazon, saying that their decision will allow retailers in Maine to go toe-to-toe with Amazon. He added that retailers will have the chance to compete with other massive retailers that are out of state that are not required to pay Maine's state sales tax.
Gervais said Amazon's decision is welcome news to retailers in Maine. He said the news was also welcomed by consumers. Gervais said Amazon's decision to collect the tax from customers in Maine is the first step in evening out the playing field.
Amazon was previously exempt
In the past, Amazon wasn't required to collect and remit taxes in most states.
This was because of a Supreme Court ruling that declared that retailers don't have to collect taxes in states where they do not have a physical presence. This meant that when a buyer in those states purchased something from out-of-state retailers, then they didn't have to pay sales tax.
However, Amazon eventually started to expand by building facilities in various states.
This led to the company having a physical presence in numerous states. As they expanded, they began collecting sales taxes. Some states require businesses to collect sales tax when they have a physical presence in the state, but Amazon also worked out deals with various state governments to collect sales tax on consumers' online purchases.
