EcommerceBytes-NewsFlash, Number 2923 - October 29, 2012     1 of 9

Amazon to Collect Sales Tax for Arizona Purchases

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Amazon.com will begin collecting sales tax for transactions in Arizona, as the Seattle Times reported on Friday.

The State of Arizona had issued assessments on behalf of the State and certain cities in November 2011 in the amount of approximately $53 million, including tax and interest, for uncollected tax for the periods March 1, 2006 through December 31, 2010. Amazon.com revealed its settlement with the state in its third-quarter filings last week.

"While we continue to believe the assessments were without merit, in September 2012, we entered into a settlement with the State of Arizona that included an agreement that Amazon and its wholly owned retailers collect and remit Arizona sales taxes beginning February 1, 2013, for sales of any physical goods, and July 1, 2013, for sales of digital products or services, as well as resolution of Arizona sales taxes up to those dates and an immaterial payment to the State of Arizona."

The settlement is just one of a spate of agreements reached with states including Nevada, Texas, Indiana, South Carolina and Tennessee.

Last week, an analyst asked Amazon.com's CEO Tom Szkutak about the impact of sales-tax collection in California, which took effect in mid-September. Szkutak said it was early, and fell back on Amazon's standard line that it collects sales tax or sales-tax equivalent (VAT) for over 50% of its revenue, and it has very good businesses in those states and geographies.

Amazon favors federal legislation that would pave the way for states to begin requiring online sellers from out of state to remit sales taxes, and the company has backed the Marketplace Fairness Act.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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