Online retail has created a challenge for sales tax collection. For example, if a company has no physical presence in a state, are they obligated to follow tax laws? It’s tricky – and Amazon has profited a good deal from being duty free. But according to The Verge, Amazon will start collecting sales taxes in all 45 states that require it starting on April 1st.
If you live somewhere without a state sales tax such as Alaska, Delaware, Montana, New Hampshire, or Oregon, this news does not affect you. However, residents of Hawaii, Idaho, Maine, and New Mexico might notice an increase on their Amazon bill next month. These aforementioned states were the last holdouts after ten states were added to Amazon’s sales tax collection on March 1st.
In order to build their physical presence, Amazon has begun opening a wide range of data centers and warehouses around the country. Depending on local law, this makes them obligated to collect sales taxes in some states while being able to arrange specific tax policies for online purchases in others.
While not charging sales tax proved to be one of Amazon’s biggest early advantages over physical stores, it doesn’t seem likely that their growth will be impacted by this development.