SAN FRANCISCO (KCBS) – Starting in April, the rest of the nation is about to join California in paying sales tax on purchases made through Amazon. The issue of collecting sales tax has become more complicated as third-party sellers have become more common on Amazon.
Since Amazon has been collecting Californian’s sales tax since 2012, you may not even remember those days. The practice of not collecting sales tax goes back to a rule surrounding catalog sales.
“There was a Supreme Court case that ruled that if you didn’t have what they called ‘nexus,’ which is basically a connection to a state, then you didn’t have to collect sales tax in that state,” tax attorney Kelly Erb told KCBS.
Erb said Amazon made that argument for years. Third-party Mom & Pop sellers on Amazon argued collecting the tax was just too complicated.
“Because you also have to think not only about the states, but also the municipalities, because places like Philadelphia and New York may also have a local sales tax,” Erb explained.
But things began to change, and as of this Saturday, the final cluster of states for which Amazon was not collecting will join California and shoppers will have to pay up.
Some consumers are no doubt wondering if there’s a loop hole.
“You could pull a Seinfeld and try to have items shipped to one of the states that don’t have a sales tax,” Erb said.
That move landed a major New York jeweler in court a few years back, so you might want to rethink that one.