With the recent news that Amazon will now be collecting sales tax in Iowa, Louisiana, Nebraska, and South Dakota, the American Booksellers Association’s updated E-Fairness Map provides visual proof that a majority of states are taking strides to level the playing field for Main Street retailers.
According to data compiled from the U.S. Census Bureau, almost 90 percent of the U.S. population resides in areas where Amazon now collects sales tax for purchases. Moreover, removing the five states that do not collect sales tax — Alaska, Delaware, Montana, New Hampshire, and Oregon — makes the numbers even more impressive: More than 92 percent of the population of sales tax-collecting states resides in areas where Amazon collects and remits sales tax.
Amazon is currently collecting sales tax in 34 states and the District of Columbia; there are only 11 states where Amazon does not collect and remit sales tax, though six of those states have passed some form of e-fairness law in an attempt to level the playing field for Main Street retailers. Some of those states passed affiliate nexus law, prompting Amazon to fire its affiliates in the state to avoid paying sales tax.
“As the updated E-Fairness Map makes very clear, states are taking significant steps to level the playing field for Main Street retailers,” said David Grogan, ABA’s director of public policy and advocacy. “The Campaign for E-Fairness has been a long one, but because of the committed advocacy of independent booksellers, alongside their indie retailer neighbors, lawmakers in most states now understand the need to level the playing field. That said, ABA understands this fight is not yet over as there are still millions of dollars of sales tax revenue being lost each year at the national level. But together with other independent businesses, we will continue to advocate for e-fairness.”
The many colors on the E-Fairness Map are a testament to the different methods employed by states to recoup required sales tax revenue. States in light blue on the map are states in which Amazon has agreed with the state to collect and remit sales tax. States in dark blue on the map, such as Missouri, have passed affiliate nexus laws, but since Amazon has fired its affiliates in those states the online retailer does not collect.
States noted in green on the map have passed an affiliate nexus and/or warehouse nexus law, and Amazon has agreed to collect and remit sales tax.
Oklahoma is shaded yellow since it passed a “use tax” law that requires remote retailers to provide customers with notification of the total sale price of their purchases so customers can pay a use tax to the state on out-of-state purchases. Colorado, Kentucky, Louisiana, Oklahoma, South Dakota, and Vermont passed similar laws, though in cases where the state also has an affiliate nexus law the map is shaded blue and in states where Amazon collects it is shaded light blue. (Colorado’s use tax law was subsequently challenged by the Direct Marketing Association [the U.S. Supreme Court recently refused to hear the case]. In lieu of the use tax law, the state passed an affiliate nexus law. In January 2016, Amazon agreed to collect and remit sales tax in Colorado.)
There are only five states that have not successfully passed laws to level the playing field for Main Street retailers: Hawaii, Idaho, Mississippi, New Mexico, and Wyoming.