Amazon to Collect Sales Tax in Rhode Island

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By John Herzfeld

Rhode Island officials are welcoming Amazon.com Inc.'s decision to voluntarily begin collecting sales tax on transactions in the state.

At the same time, Gov. Gina Raimondo (D) has pledged stronger state efforts to collect from online sellers.

Rep. Brian Patrick Kennedy (D), House speaker pro tem, told Bloomberg BNA that Amazon’s plan to collect the 7 percent state sales tax starting Feb. 1 “will not be a huge windfall in new tax revenue for the state.”

If hundreds of other online retailers were to follow suit on collecting sales tax, however, “then the revenue could be substantial,” he said in a Jan. 23 e-mail.

Raimondo’s fiscal 2018 budget proposal calls for collecting $34.7 million more in sales tax revenue from remote sellers “by adding tools to enforce existing law and collect sales tax revenue from companies without a physical presence in the state.”

She said the effort would affect “mostly e-commerce companies that have been undercutting local brick-and-mortar stores by avoiding sales taxes.”

‘Trend Across the U.S.’

Department of Revenue spokesman Paul Grimaldi said in a Jan. 19 statement that while confidentiality protections prevent him from commenting on any actions by a particular entity, “we’re certainly happy that a remote seller may have stepped forward to voluntarily collect and send Rhode Island sales and use taxes.”

“We believe that this is the trend across the U.S. and the right thing for the preservation of Main Street Rhode Island,” he said.

With the addition of Rhode Island, Amazon now collects for 36 of the 45 states with a sales tax, plus the District of Columbia.

To contact the reporter on this story: John Herzfeld in New York at jherzfeld@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

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