Amazon has long fought to keep its customers from paying sales tax, but now that's looking like a losing battle. More and more states are now forcing customers to pay sales tax on Amazon purchases. In fact, 69% of Americans can expect to pay a little extra tax on any purchase they make on the online retail giant.
In the past, Amazon's lack of sales tax was a huge selling point for the company. But, states are now cracking down on that advantage by citing an old Supreme Court ruling.
Now, Amazon perceives itself as disadvantaged versus online rivals such as eBay and Overstock. That's because a 1992 Supreme Court ruling allows states to apply sales tax to any retailer with operations in the state, which some states have interpreted to include partners.
Amazon customers who live in states that have the company's offices, warehouse or distribution facilities have probably paid taxes for a while now. But, citing that ruling means that states could also force customers to pay sales tax if any of Amazon's partners operate in their state. That's casting a really wide net because Amazon works with almost every major retailer across the country to sell goods.
But, that doesn't mean every state forces you to pay sales tax on Amazon. There are still a few out there where you can get by tax-free.
The sales tax map
Even customers in states that don't currently charge sales tax on Amazon purchases could be forced to pay up soon. That's because Amazon seems like it's always expanding. The company is building more distribution facilities so that it can store more goods and deliver them quicker to highly-populated areas.
That's likely good news for traditional stores that have lost out on a lot of business because of Amazon. Customers like how convenient and affordable Amazon is. This spike in sales tax will hurt that advantage, but the company still has a few tricks up its sleeve.
Amazon is known for providing affordable quick shipping on a lot of items. Customers who purchase an Amazon Prime membership get free 2-day shipping on all qualifying purchases.
The Wall Street Journal has a created a nice color-coded map to show you which states currently charge sales tax on Amazon purchases.