Anonymous
Anonymous asked in Business & FinanceCorporations · 9 months ago

Amazon used to not charge sales tax, why did they suddenly start?

13 Answers

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  • 7 months ago

    Depending upon what state you're in, Amazon (and every other seller) would have to charge sales tax if they had a "physical presence" in your state.  Billions of dollars in sales and use taxes were "uncollectable" for residents who bought things in other states and simply failed to pay the sales taxes they owed to their state of residence (often called "use tax").   Some states tried to sue the sellers for disclosure of the names of those criminals or to force the sellers to collect the taxes and turn them over to the states.  Until 2017 that didn't work very well, due to constitutional questions of interstate jurisdiction for state taxes.

    Under the US Supreme Court decision of South Dakota v. Wayfair (2017), the court ruled that the previously lack of "physical presence" in the taxing state should not override the states' legal power to sue out-of-state vendors for failing to collect the sales taxes, as required by state law.

    So, in effect, the federal courts may now hear and adjudicate tax claims against sellers who have "no physical presence" in the taxing state, putting the burden on sellers to find out every sales tax law in every state into which they happen to ship a product, collect that tax, and deposit the tax into each corresponding treasury (state or local).

    Bottom line: Amazon was only the biggest violator and brought down the entire system for everyone selling online or via mail order.

  • 9 months ago

    The sales tax laws finally caught up to them and they were sued. Some of the laws were a bit fuzzy, so the courts clarified them See this article from early 2017 

  • Judy
    Lv 7
    9 months ago

    The sales tax laws finally caught up to them and they were sued. Some of the laws were a bit fuzzy, so the courts clarified them See this article from early 2017

    https://money.cnn.com/2017/03/29/technology/amazon... .

  • 9 months ago

    The states' taxing departments made a big fuss over losing revenue and Federal government approved a practice to require most major internet providers to collect and forward state taxes.

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  • 9 months ago

    When the government made them. It wasn't their choice.

  • Anonymous
    9 months ago

    laws were passed. Same for ebay.

  • 9 months ago

    Because the law was changed to include taxes for online purchases. It wasn't their doing, it was the State's.

  • 9 months ago

    Lawsuits from State DAs, about the lack of State Sales Tax revenue.

  • 9 months ago

    It’s been years since amazon hasn’t charged taxes. 

    A lot of companies (mostly small businesses) were complaining that amazon had an unfair advantage because most states don’t require taxes on internet goods if the company doesn’t have a storefront in that state. Amazon operates out of a warehouse back then. Why would people buy something from a store and pay taxes when they can order from amazon at the same price or cheaper and not pay taxes. States were also complaining that they were losing out on money once they found out how much amazon was taking in. 

    Amazon said it would be happy to charge taxes but they can’t because of state rules. Once the laws were changed, amazon started collecting taxes. 

  • Anonymous
    9 months ago

    the Supreme Court made them

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