why is there no tax on amazon
Items sold on Amazon. com and shipped to certain states may be subject to tax. How Tax is calculated The amount of tax charged on your order depends on many factors including the identity of the seller, type of item or service purchased, the time and location of fulfillment, and the shipment or delivery address of your order. These factors can change between the time you place an order and when its delivery is completed. As a result, the tax calculated on your order may change; therefore, "Estimated Tax" is displayed at Check Out when confirming an order. The amounts displayed as estimated tax may then be updated later when your order is finalized and completed. The tax rate applied to your order will be the combined state and local rates of the address where your order is delivered to or fulfilled from. However, the destination of your order's delivery will often determine if tax is applicable. For example, if you live in a state that does not impose a sales tax, you may still see tax calculated on your order if shipped to another state.
Moreover, the tax rates applied to your order may also be different for a variety of reasons, such as a shipment to a residential home versus a business address. Also, please note, the total selling price of an item will generally include item-level shipping and handling charges, item level discounts, and gift wrapping charges. These charges, if applied at an order level, may be allocated to the individual items in an order. Note: No tax is charged when purchasing gift cards; however, purchases paid for with gift cards may be subject to tax. Items sold by Warehouse Deals and shipped to destinations in Alaska may be subject to local tax. Textbooks rented from Warehouse Deals and shipped to destinations in Delaware are subject to tax. Items sold by Amazon. com and its affiliates that are shipped to destinations in the following states may be subject to tax:
Why doesn t Amazon. com collect sales tax from the majority of Americans who buy from the company?
Because, according to CEO Jeff Bezos, it would be unconstitutional to do so although the company does support a proposed change in the law that would allow everyone to pay taxes on their purchases through Amazon. The subject came up in a conversation Bezos had with Consumer Reports, where he explained why Amazon doesn t currently collect sales tax from customers in states where it has no employees or warehouses: [I]n the U. S. , the Constitution prohibits states from interfering in interstate commerce. And there was a Supreme Court case decades ago that clarified that businesses Б it was mail-order at that time because the Internet did not exist Б that mail-order companies could not be required to collect sales tax in states where they didnБt have whatБs called Бnexus. Б And thatБs a very clear decision. The topic has been pushed lately, with Amazon closing warehouses in Texas and South Carolina when the states have raised the tax issue, as well as canceling thousands of affiliate accounts in Colorado and Illinois after those states demanded taxes.
But, Bezos says, it s not that Amazon is tax-phobic: Our point of view on this is that we should simplify the sales tax system, and weБve been consistent on this for about 10 years. ItБs called the Streamlined Sales Tax Initiative. I think 22 or 23 states have signed onto it. Because the right way to fix this is with federal legislation. ThatБs where it can be fixed properly. Sales tax collection is very complicated. And, you know, weБre no different from big chains of retailers Б they donБt collect sales taxes in states where they donБt have nexus, either. So everybody is following the same rules. He went on to add, I don t think our customers would say, Why don t you just optionally collect the tax? I know you re not required to do it, but aw, go ahead. ' Well, sure. If you re going to start appealing to people s inherent cheapness, then go right ahead. More on Techland:
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