Amazon.com Sales Tax Starts Sunday
You'll need to pay sales tax to see those brown boxes. Photo courtesy flickr.com/24079740@N05/Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
By Carlos Morales
In less than 48 hours, the online retailer Amazon.com will start charging Texas sales tax on things you buy from its site. It’s part of a deal with the state that could have big implications for online commerce.
Texas will become only the sixth state to charge sales tax on Amazon purchases. The switch comes under an agreement with the Texas comptroller’s office. In 2010, the comptroller’s office had claimed that Amazon owed the state $269 million in uncollected sales tax.
For many brick-and-mortar operations the move will level the playing field.
“This gives every retailer whether you’re big, whether you’re small, whether you’re online, or whether you’re on Main Street, gives everyone the same set of rules to play by,” said Jason Brewer of the Retail Industry Leaders Association. “And ultimately that’s good for business and good for the consumer.”
Brewer says the action in Texas could serve as a template for other states and the rest of the nation. But Raj Raghunathan at UT’s McCombs School of Business says customers won’t be happy about it.
“The negativity that arises from the fact that they know that the price is higher than what they could’ve paid or would’ve paid in the past can be negative enough, can be intense enough for them to actually not want to shop online,” Raghunathan said.
Amazon already collects sales tax in Kansas, Kentucky, New York, North Dakota and Washington. Sales tax collections in Texas begins on Sunday.
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