The Amazon sales tax problem

On Behalf of | Nov 17, 2017 | Sales Tax

Amazon is one of the biggest online retailers in the world. Millions of people use the site to sell their own goods, and Amazon itself offers popular products at relatively low prices. For a long time, the company got away with not charging sales tax. In 2013, the state of Connecticut said no more. While the company itself may charge Connecticut residents sales tax, personal sellers have not been too great about it, leaving them and Amazon on the hook for quite a bit in unpaid taxes.

According to a recent story in The New York Times, more states are pushing Amazon to charge sales tax. Amazon, for the most part, has been doing its part, but they have asked personal sellers to collect and pay sales tax on their own. Unfortunately, this has not been happening, and certain states are trying to hold Amazon accountable.

Some states have sued Amazon in the effort to collect millions in unpaid taxes. The results of those cases are still pending. Amazon, starting in January, will collect sales tax directly from sellers who store and sell items in the company’s home state. But this does not solve the nationwide problem. The government is asking Amazon to hand over information about sellers and products being held at company holding facilities in each state, so they can seek to collect directly from independent sellers.

The millions in unpaid sales taxes that the government hopes to collect could hurt Amazon and those who choose to sell through its site. There are those who may also face false accusations of failing to pay taxes for their sales. Those in Connecticut and elsewhere who stand accused of failing to collect and pay sales tax for their Amazon products can help themselves by getting ahead of the problem by seeking assistance from an experienced tax attorney.

Source: The New York Times, “Amazon Sellers Brood as States Come Calling for Taxes“, Nick Wingfield, Nov. 15, 2017