Tuesday, January 21, 2014

Amazon just got more expensive. That's good

Amazon.com's decision to collect N.C. sales taxes next month might not be the best news for your next big-screen TV purchase, but it’s the right decision for North Carolina and its businesses.

Amazon announced Saturday that it would begin collecting taxes Feb. 1 in North Carolina, as it does in 19 other states. Amazon also has agreed to start collecting sales taxes in South Carolina in 2016.

That means beginning in February, when you make a purchase on Amazon.com, you also will pay North Carolina’s 4.75 percent sales tax at checkout. That also means you might not have as much incentive to choose Amazon over brick-and-mortar retailers who’ve long been disadvantaged by having to collect those state sales taxes when customers come into their stores.

Keep in mind, the taxes that Amazon will be collecting are not new taxes. They are taxes that N.C. residents are supposed to declare on their state tax returns when they make online purchases. As you might imagine, that doesn’t happen nearly as much as it could, which results in the state, cities and counties losing about $200 million a year in revenue. Nationally, states lost an estimated $23.3 billion in 2012 from uncollected sales taxes from online and catalog sales.

That’s why North Carolina and other states have tried, mostly unsuccessfully, to get online retailers to collect taxes or at least turn over the names of customers who make online purchases. Last year, the U.S. Senate passed the Marketplace Fairness Act, which allowed states to collect taxes on online purchases from out-of-state retailers.

The Fairness Act would not have burdened small retailers - it exempted businesses with less than $1 million in annual sales. The bill also required states to streamline their tax collection process and provide software to make collection easier on retailers. But the bill never made it through the House.

Congress should try again. Online sales – despite some 2013 holiday delivery issues – will continue to surge. Amazon is doing the right thing by collecting taxes in more states, but there are other retailers out there who don’t. Customers might like the better deal they get because of it, but it’s a raw deal to local businesses.


Gipper1965 said...

The NC GOP giveth and taketh away. I thought were are supposed to hate government? So, why are we giving them more money?

WashuOtaku said...

One of the few O-pinions that has nothing to do with politics and the first comment is about politics. >_>

Wiley Coyote said...


NC had nothing to do with this:

Last year, the U.S. Senate passed the Marketplace Fairness Act, which allowed states to collect taxes on online purchases from out-of-state retailers.

The Same US Senate that is controlled by Democrats.

rky84 said...

Amazon released the news on Saturday. The Observer reported it on Tuesday. That is some breaking news.

Someone needs to say why Amazon is making this change; especially after fighting it not that long ago.

Lana said...

Gipper and Wiley, you are both wrong.

Gipper, the law that enabled Amazon to do this was passed in 2009 (Democratic-controlled NC legislature and Democratic governor).

Wiley, a bill doesn't become law just because the US Senate passes it. The House didn't pass the bill, so the Senate bill is not in effect.

Garth Vader said...

"Customers might like the better deal they get because of it, but it’s a raw deal to local businesses."

Wrong. If customers get a better deal, they have more disposable income to spend locally.

Oh, and it was the ACLU that fought against having customer data turned over to the government. Of course now with Obama's NSA the Observer is all for that.

Ghoul said...

So when will the Observer be remitting back taxes to the state since newspapers were exempt from sales up until Jan 1, 2014? And newspapers sold from paper boxes are still exempt? Come on Taylor, write the state that check for millions you owe.

New England said...

I actually don't follow this stuff, but was an avid Amazon fan until recently. Now, I can't afford to shop there so have been forced to purchase the same things - for much less - at Walmart. Very sad about this, I really liked Amazon. Seems as if they are getting a bit "cold and creepy" about taxes, pricing and refusal to ship merchandise that is advertised as being "free shipping", but is not, even while spending over the $35 amount. So, they have lost a customer.

Brendon Wayne said...

I'm glad that they still consider small time online businesses for tax exemption.
Expatriate Tax services

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