Sales Tax Slice: Massachusetts Is Latest State to Strike Deal With Amazon


As states are becoming more aggressive in their pursuit of additional revenue from sales made over the Internet, online retailers are increasingly facing the prospect of sales tax collection responsibility in multiple states. Amazon, the nation’s largest online retailer, has led the way in challenging states’ rights to collect sales tax on online sales, but it recently has reached agreements with a number of states to start collecting sales taxes.

Under the typical agreement, Amazon promises to locate facilities within a jurisdiction in exchange for the state’s agreement to defer sales tax collection until a future tax year. These agreements would be supplanted or preempted if federal legislation is enacted.

The most recent agreement by Amazon is with Massachusetts, where Amazon will begin collecting the 6.25 percent state sales tax on Nov. 1, 2013. The deal follows Amazon’s acquisition ofKiva Systems in North Reading, Mass., last summer, according to a Dec. 12 story in BBNA’s Daily Tax Report.

For a listing of similar deals Amazon has struck with other states, see this earlier SALT Tax post which lists the quid and the profor each agreement.

The following is a list of the states where Amazon collects sales tax and the dates collection by Amazon begins, based on agreements the retailer has reached with the states:

 

  • Arizona – Feb. 13, 2013

  • California – Sept. 15, 2012

  • Indiana – Jan. 1, 2014

  • Kansas – currently collects tax due to nexus

  • Kentucky – currently collects tax due to nexus

  • Massachusetts – Nov. 1, 2013

  • Nevada – Jan. 1, 2014

  • New Jersey – July 1, 2013

  • New York – currently collects tax due to nexus

  • North Dakota – currently collects tax due to nexus

  • Pennsylvania – Sept. 2012

  • South Carolina – Jan. 1, 2016

  • Tennessee – Jan. 1, 2014

  • Texas – July 1, 2012

  • Virginia – Sept. 1, 2013

  • Washington – currently collects tax due to nexus

For additional information about state tax collection on online sales, see Bloomberg BNA’s Sales and Use Tax Navigator .

By Nancy Emison

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