While the status of federal sales tax legislation may be up in the air at present — especially in light of this week’s election results that will give the GOP control of the U.S. Senate — an E-Fairness Map released this week by the American Booksellers Association makes one thing abundantly clear: The number of states tackling e-fairness on their own continues to grow.
Out of the 45 states that collect sales tax, 33 have taken action to recoup lost sales tax revenue by passing a law and/or striking a deal with Amazon.com to collect sales tax in exchange for opening a facility. Nineteen of the 33 states have passed some form of sales tax fairness law.
The many colors of the map are testament to the different methods employed by states to recoup required sales tax revenue. States such as New York (in blue) have passed affiliate nexus laws, which require remote retailers with a broad network of affiliates in the state to collect and remit sales tax in the state. As a result, in a number of these states Amazon fired its affiliates. The retailer also challenged the law in New York. However, the law was upheld by three state courts, and the U.S. Supreme Court refused to hear appeals of those rulings in December 2013.
States noted in green on the map have passed an affiliate nexus and/or warehouse nexus law, and in these states Amazon has agreed to collect and remit sales tax, in most cases due to a facility that they have opened or have agreed to open in the near future.
In a number of states noted in orange, Amazon has made deals to open warehouse facilities and in exchange has agreed to collect and remit sales tax to the state.
States noted in yellow have passed “use tax” laws that require remote retailers to provide customers a notification of the total sale price of their purchases. In this way, the state hopes to prompt customers to pay use tax to the state on out-of-state purchases.
Meanwhile, Colorado (in maroon) passed the Marketplace Fairness & Small Business Protection Act in June 2014, a law that clarifies Colorado’s sales tax laws to stipulate that remote sellers that have an office, distribution facility, salesroom, warehouse, or storage place in Colorado are required to collect and remit sales tax to the state, as reported by Deloitte’s Multi-State Tax Alert. The law went into effect on July 1, 2014.
To download the map below in an 8-1/2 x 11 format, click here.