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Amazon Collects Sales Tax In Three More States

Seattle – will begin collecting sales tax today on items purchased by residents in Connecticut, Massachusetts and Wisconsin. 11/01/2013 05:12:00 AM Eastern

Seattle will begin collecting sales tax today on items purchased by residents in Connecticut, Massachusetts and Wisconsin.

Separately, the e-tailer has begun donating a percentage of all qualified purchases to charity groups under a new AmazonSmile program.

The three latest additions bring to 15 the number of states that have hammered out sales tax collection deals with Amazon, often in exchange for temporary tax amnesty and other incentives to open distribution centers within their borders.

The e-tailer, which initially resisted e-commerce sales tax collection, is now embracing it proactively in advance of possible national legislation, and as it looks to reduce delivery times by opening scores of warehouses around the country.

A majority of the U.S. population resides in the 15 states where Amazon now collects sales tax, although studies by investment firms have found little change in customer buying behavior after sales taxes were imposed.

In Connecticut, the move follows a deal struck in February in which the e-commerce colossus agreed to open a $50 million distribution center in the Nutmeg State in lieu of paying the state back taxes, local news radio channel WCBS 880 reported.

According to Connecticut Department of Revenue Services Commissioner Kevin Sullivan, the state expects to collect $15 million in taxes on Amazon sales in the first year alone, based on its 6.35 percent sales tax rate.

Separately, Amazon has begun donating 0.5 percent of the purchase price of millions of eligible items to customers’ charities of choice. Nearly a million charitable organizations are participating in the program, dubbed AmazonSmile, including the American Red Cross and St. Jude’s Children’s Research Hospital. Customers merely need to shop at and select an eligible organization.

“We’re offering customers a way to support charitable organizations around the country that’s simple and automatic,” said AmazonSmile general manger Ian McAllister. “We think customers will love the opportunity to support their favorite organizations without changing how they shop, and there’s no cap on how much Amazon will donate.”

Amazon said Smile customers will experience no difference in the site’s selection, prices or service.

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