As of November 2012, the following states tax shipping:

states tax shipping

states tax shipping

The following states tax shipping:

Arkansas
Connecticut
Georgia
Hawaii
Indiana
Kansas
Kentucky
Michigan
Minnesota
Mississippi
North Carolina
North Dakota
Nebraska
New Jersey
New Mexico
New York
Ohio
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Vermont
Washington
West Virginia
Wisconsin

Amazon’s vested interest in universal online sales tax

universal online sales tax

universal online sales tax

Marketplace-Fairness-Act
With the addition of a new Amazon distribution center in Kenosha, WI, the number one largest online retailer will soon be collecting sales tax from almost 50% of the American population.

Amazon will begin collecting Wisconsin sales taxes on Nov. 1 and the state expects to benefit to the tune of $30 million per year.

universal online sales tax

Beginning Nov. 1st, Wisconsin will become the 14th state Amazon collects sales tax for. The mega-retailer has arrangements to add at least 6 more states to that list over the next 3 years.

Amazon currently has nexus is 18 states. Nexus, a physical in-state business presence, has long been the determining factor behind which businesses have to collect sales tax. Nexus is created by brick and mortar stores, distribution centers or warehouses, call centers,  offices, sales people, and sometimes just by sending an employee to a convention.

The mega-retailer already collects sales taxes in Arizona, California, Georgia, Kansas, Kentucky, New Jersey, New York, North Dakota, Pennsylvania, Texas, Virginia, Washington and West Virginia. Amazon has a physical presence in all of those states except for Georgia and New York.

Georgia passed a law in January requiring all online retailers doing business within the state to collect sales taxes and Amazon complied starting last September. New York won a court appeal upholding the state’s right to claim nexus is created when an out-of-state retailer pays in-state affiliates a commission to promote their products or services. New York refers to this as “click-through nexus”.

Amazon shut down its Connecticut affiliate program back in 2011 to avoid click-through nexus in that state but may be thinking about restarting the program as it recently announced that it will begin to collect Connecticut sales taxes and invest $50 million over the next two years for a jobs initiative.

Amazon has distribution centers in New Hampshire and Delaware where neither state has a sales tax. It also has centers in Indiana, Massachusetts and Nevada and has agreed to begin collecting sales tax in these states in the near future.

Amazon has acknowledged that it has nexus in Tennessee and South Carolina, but made special deals with those states which allow it to postpone sales tax collections for a time. Tennessee Gov. Haslam agreed to hold off on an Amazon tax until 2014 if the retailer agreed to send notifications to all customers about how much tax they owed on their purchases going back through 2012. South Carolina made a deal that exempts the company until 2016 in return for a promised distribution center and its 1,200 jobs. The state left itself an escape clause saying the agreement would be nullified should the Marketplace Fairness Act pass and create a standardized set of federal regulations.

This patchwork of regulations, state-by-state agreements and endless legal battles seems to be the main impetus behind Amazon’s support for the Marketplace Fairness Act or universal online sales tax. This law would significantly ease Amazon’s burdens while simultaneously increasing the burden on other smaller online retailers. Amazon stands to significantly widen its lead over the competition.

Compromise on Kansas sales tax increase proposed

Kansas sales tax

Kansas sales tax

Kansas lawmakers continue to negotiate over the upcoming sales tax increase. The Kansas sales tax is set to increase from 5.7 % to 6.3 % in July. The Senate and Gov.  Sam Brownback both want this full increase to go through to pay for a reduction in the state income tax rates. Republicans in the House are opposed.

This week, House Republicans proposed a compromise that would reduce the proposed sales tax increase to 6 %, dropping the total increase by half. House Democrats still oppose any increase to the state’s sales tax rate and want to fund the government with higher income tax rates. House Republicans have locked them out of negotiations so far.

Senate Republicans are currently reviewing this compromise before returning to negotiate with the House. If the two sides can agree on a new rate, it will then go up for an official vote in the House and Senate.

Read more at The Wichita Eagle

Kentucky to launch tax amnesty program

tax amnesty

tax amnesty

For two months, starting Oct. 1, taxpayers who owe Kentucky back taxes from between Dec. 1, 2001 and Oct. 1, 2011 will be eligible for a tax amnesty program.

Qualifying taxpayers will pay only the taxes owed and half of the interest.  Kentucky will waive all penalties and fees and the other half of the interest.

Substantial fees and penalties could be assessed on taxpayers in arrears who do not take advantage of the amnesty program, so the Kentucky Department of Revenue highly suggests use of the Kentucky Voluntary Disclosure Program and consultation with a qualified multistate tax consultant.

For more info, go to Kentucky Amnesty.

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