How does amazon determine if they collect sales tax?

[Lips_Obsession]

I know quite a few states have come to agreements with Amazon to have Amazon collect sales tax on items they sell.

My question is how does Amazon determine if they should collect tax on an order? Is it based on the shipping address, or based on the primary account holder? Or would it be based on the billing address?

[slash2k]

@Lips_Obsession

I know quite a few states have come to agreements with Amazon to have Amazon collect sales tax on items they sell.

My question is how does Amazon determine if they should collect tax on an order? Is it based on the shipping address, or based on the primary account holder? Or would it be based on the billing address?

That depends on state law.

In my state (Kansas), we have destination-based sales tax; it’s based on the address to which the goods are delivered. I think most states have or are moving to destination-based taxes, but some states at least used to collect based on where the goods were ordered (billing) or the address FROM which they were shipped.

[iamthewalrus_3]

Oh magic internets, grant us thy wisdom.

[engineer_comp_geek]

Moderator Note

@iamthewalrus_3

Oh magic internets, grant us thy wisdom.

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[Colibri]

@iamthewalrus_3

Oh magic internets, grant us thy wisdom.

Moderator Note

From the General Questions Rules.

we aren’t interested in hearing about how stupid the question was because a search could have answered the question. Nor are we interested in hearing how simple it was for another poster to find the answer in a search engine. If it’s that simple to find the answer, go ahead and post the answer.

Thanks for your cooperation.

Colibri
General Questions Moderator

ETA: Simulnote!

[bonitahi]

How’d you two do that?

[johnpost]

@Colibri

Moderator Note

From the General Questions Rules.

Thanks for your cooperation.

Colibri
General Questions Moderator

ETA: Simulnote!

@bonitahi

How’d you two do that?

those two have the sharp eyes and lightning fast reflexes that Amazon wished they had.

[LSLGuy]

@johnpost

those two have the sharp eyes and lightning fast reflexes that Amazon wished they had.

And they can collect the double Mod tax regardless of your state of residence.

[md2000]

I seem to recall reading somewhere that a number of states require you to declare any sales taxes from out-of-state purchases that the merchant did not collect for you… and some ask you to declare that you have completely paid all such sales taxes, as part of your annual income tax return. thus you must either pay up or lie on your return and risk even more liability if someone does an audit and discovers your misinformation.

So if Amazon didn’t calculate it, you must… based on your state of residence. I assume this means that if you have it shipped across the border to a no-tax state, and go to pick it up, you are still liable for the taxes.

[Really_Not_All_That_Bright]

Amazon collects sales tax based on the shipping address. Note that most states with sales taxes nominally require residents to pay use taxes on online purchases if the seller does not collect sales tax. I say nominally because nobody I know actually pays.

[Duckster]

@Really_Not_All_That_Bright

Amazon collects sales tax based on the shipping address. Note that most states with sales taxes nominally require residents to pay use taxes on online purchases if the seller does not collect sales tax. I say nominally because nobody I know actually pays.

Note the specific language in the link:

Items sold by Amazon.com LLC, or its subsidiaries, and shipped to destinations in the following states are subject to tax:

I live in one of those tax states, but I don’t always pay tax on my “Amazon” purchases. If the seller isn’t Amazon, or a subsidiary, I don’t pay tax, providing the seller is not physically located in my state.

[MikeS]

@md2000

I seem to recall reading somewhere that a number of states require you to declare any sales taxes from out-of-state purchases that the merchant did not collect for you… and some ask you to declare that you have completely paid all such sales taxes, as part of your annual income tax return. thus you must either pay up or lie on your return and risk even more liability if someone does an audit and discovers your misinformation.

Massachusetts did this when I lived there. However, they also offered you a line on your tax return to add in $20 (or something like that) to your tax bill to cover your liability, regardless of what it was. I always elected to pay the extra money, since I figured it was worth $20 to me to not have to deal with the hassle of keeping track. Plus, I did order a fair amount of stuff online while I was living there, living in a small town with minimal shopping opportunities.

[boytyperanma]

@Duckster

I live in one of those tax states, but I don’t always pay tax on my “Amazon” purchases. If the seller isn’t Amazon, or a subsidiary, I don’t pay tax, providing the seller is not physically located in my state.

Amazon made it a bit more complex than that. Amazon offers Amazon Fulfillment. A vendor can send merchandise to Amazon, when it sells Amazon ships it to the customer. Rather than try to write a program to incorporate where and how merchandise gets to a location, they simply implemented their rule. Any vendor who uses Amazon Fulfillment is considered to have a presence in any state that has an Amazon warehouse. Amazon will collect any required local sales tax.

The only time you won’t pay your states sales tax for purchases through Amazon is if: There is no Amazon warehouse in your state or the item is shipped directly from a vendor that has not used Amazon Fulfillment.

[Waterman]

@md2000

I assume this means that if you have it shipped across the border to a no-tax state, and go to pick it up, you are still liable for the taxes.

I live in southern Washington approximately 35 miles from the Oregon (which has no sales tax) border. To help promote business with Oregon residents, merchants in our area are allowed to not collect sales tax if proof of residency (read: drivers license) is provided. Note that Amazon does not have a location in our area where you can actually pick up merchandise so my response does not apply to Amazon orders.

[Lord_Feldon]

@md2000

I seem to recall reading somewhere that a number of states require you to declare any sales taxes from out-of-state purchases that the merchant did not collect for you… and some ask you to declare that you have completely paid all such sales taxes, as part of your annual income tax return. thus you must either pay up or lie on your return and risk even more liability if someone does an audit and discovers your misinformation.

This is correct. The vast majority of people do not do it, though. The number of tax returns with use tax declared is something ridiculously low like 0.8%, even though the number of people who owe it is obviously a lot higher.