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Amazon.com Inc. now has an agreement to collect statewide sales and use taxes in each state that imposes them.
The retail giant will begin collecting Maine’s 5.5 percent sales tax on all products shipped to the state starting April 1, Gov. Paul LePage’s (R) office announced March 20. Maine was the last state with a statewide sales tax where the company didn’t have an agreement to collect. Delaware, Montana, Oregon, New Hampshire and Alaska don’t impose sales taxes at the state level.
George Gervais, commissioner of the Maine Department of Economic and Community Development, called the agreement with Amazon “welcome news to Maine retailers and consumers.”
“Maine businesses can go toe-to-toe with the very best out-of-state companies, provided they are competing on an equal playing field. Amazon’s decision to collect and remit sales tax to the State of Maine is an important first step in leveling the playing field,” Gervais said in a statement.
As part of a flurry of announcements this year, the company also recently agreed to collect sales taxes in Hawaii, Idaho and New Mexico. The company declined to comment beyond the announcements.
Amazon has had a mixed relationship with state and local taxes since its founding in 1994.
The company’s early success as a retailer was due in part to its refusal to collect state sales and use taxes. During that time, Amazon cloaked itself in immunity under the nexus standard established by the U.S. Supreme Court in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), which bars states from requiring remote sellers to collect and remit taxes if the vendor lacks a physical presence in the state.
Many states have launched direct attacks on the Quill rule, but Amazon has largely decided to comply with the new regimes—as they have in Alabama and South Dakota, which have been at the forefront of the state challenges. Retailers including Wayfair Inc., Overstock.com Inc. and Newegg Inc., in contrast, have sued to fight new sales tax laws like South Dakota’s.
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