E-Fairness Continues to Expand: Amazon Collecting in 39 States and D.C.

Updated: Wednesday, January 25, 2017

The list of states where Amazon collects and remits sales tax continues to grow.

In the days and weeks after declaring that it would begin collecting sales tax in Iowa, Louisiana, Nebraska, South Dakota, and Utah, Amazon has announced it will start collecting sales tax in Mississippi, Missouri, Rhode Island, Vermont, and Wyoming. This brings the total number of states where Amazon has agreed to collect and remit sales tax to 39, plus the District of Columbia.

Mississippi

On Tuesday, January 24, the Clarion-Ledger reported that, according to Mississippi Department of Revenue Commissioner Herb Frierson, on February 1 Amazon will begin collecting a seven percent tax on Mississippi sales and returning it to the state. The tax is technically a “use” tax in Mississippi.

The Mississippi Department of Revenue had been negotiating with Amazon for some time, Frierson told the paper, which reported that Frierson “plans, through ‘administrative process,’ to start asking companies that do $250,000 or more a year in online sales in Mississippi to start collecting and returning a seven percent ‘use’ tax that has been on the books for years, and which some state leaders have said online sellers should already be paying.”

Frierson added, “If they do this voluntarily, we won’t go back and do a three-year audit on them.”

Missouri

On Tuesday, January 24, KY3 News reported that Amazon would begin charging sales tax for customer purchases made in Missouri. According to the TV station, a statement to that effect was sent via e-mail by Amazon spokesperson Jill Kerr.

In 2013, Missouri passed an affiliate nexus law, but Amazon fired its affiliates in Missouri so that it could avoid collecting sales tax in the state.

Rhode Island

On January 18, Rhode Island announced that it had struck a deal with Amazon, and that, beginning February 1, the online retailer would collect and remit sales tax on purchases made by Rhode Island residents, as reported by the Providence Journal.

Paul Grimaldi, a spokesman for the Rhode Island Department of Revenue, told the Journal that such voluntary steps have become a trend across the country and are “the right thing for the preservation of Main Street Rhode Island.”

House Speaker Nicholas Mattiello also said it was a win for the state “because it levels the playing field between Main Street and the Internet.”

Wyoming

In Wyoming, on January 12, Gov. Matt Mead said that Amazon would be collecting sales tax on purchases made by Wyoming residents, as reported by the Star Tribune. The deal had been struck back in November 2016, the article noted, but the online retailer will begin collect sales tax on Wyoming purchases in March. Though it is not certain how much money the agreement will generate for the state, a press release from the governor’s office said: “The news comes at a time when Wyoming is facing an historic budget crisis. The additional tax collections will not come close to solving the issues the state faces, but will obviously help.”

The governor also told the Tribune that the deal will level the playing field for Wyoming businesses, which already collect sales taxes. “Wyoming businesses are at a disadvantage when Internet businesses fail to collect tax,” Mead said. “This is an important step in the right direction.”

Wyoming is also working on an e-fairness bill, which would require other large, online remote retailers to collect and remit in the state. Under the law, a business would have to conduct $100,000 in sales or 200 separate transactions in Wyoming annually, the Tribune reported.

Vermont

On Monday, January 23, Amazon announced that it would begin collecting and remitting sales tax on orders made by Vermont residents on February 1, as reported by the Burlington Free Press.  

Vermont’s tax department told the Free Press that they’re happy with the change, explaining that it will create more equity between local stores and online retailers.

The news comes seven months before a state affiliate nexus statute was set to go into effect.