Where does Amazon collect sales tax? Why?

One of the things that I about Amazon was that my orders didn’t get dinged with sales taxes.

That was then, this is now.

In 2013, I was disappointed to see Amazon start collecting sales taxes in Virginia (my home state).

But, no collected sales tax in Maryland – next state over – where we have a summer vacation shack. shack and a branch of the family tree.

Hmmm …

The arbitrage opportunity evaporated in 2014 when Amazon started collecting sales tax in Maryland.

Nuts.

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Source

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Some recent purchases sparked my curiosity .  What’s going on?  Are there still arbitrage opportunities?

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What’s going on?

IMany states (about half) have enacted “physical presence” laws.

That is, if an internet retailer has a physical office in the state – a store, warehouse, sales office, etc. – then the retailer is legally required to collect sales taxes.

Some states go a bit further and say that an internet retailer that has an affiliate with a presence in the state – think, the zillions of Amazon Marketplace merchants – then the retailer has to collect.

Well, in the spirit of fast & efficient delivery, Amazon has been slapping distribution centers up in a lot of states )usually states with major metro centers).

And, to broaden selection without the added burden of inventory, Amazon has been expanding its affiliate programs exponentially.

Distribution centers in Virginia and Maryland means sales taxes get collected.

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Any arbitrage opportunities left?

Sure.

First for Amazon …  no physical presence in DC, so I guess I can just have everything shipped to my son’s house.

Hmmm.

Or, I can just buy from non-Amazon retailers who have neither physical presence or affiliates in VA and MD.

Still plenty of them around … and many essentially match Amazon’s low prices and free shipping.

Problem is the hassle of searching the places and prices.

Still, 5 or 6 percent is worth shopping for, right?

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Just in case the map isn’t clear enough, here are the states where Amazon collects sales tax:

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For even more detail, se Internet Sales Tax: A 50-State Guide to State Laws

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