Amazon To Collect Sales Tax In Illinois - Twice

Amazon To Collect Sales Tax In Illinois

Impact on sales unclear
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Illinois will become the 24th state in which Amazon.com collects sales tax beginning next month.

Chicago — Illinois will become the 24th state in which Amazon.com collects sales tax beginning next month.

According to the Chicago Tribune, all out-of-state-based e-tailers with either a physical presence in Illinois or local “affiliates” such as third-party sellers, will be required to collect the state’s 6.25 percent use tax beginning Feb. 1.

Amazon, which said it plans to open the first of several distribution centers in Illinois later this year, will have both.

Based on past consumer shopping patterns, the No. 1 e-tailer may experience a 10 percent drop in Illinois sales volume, mostly on bigger-ticket purchases, according to Itzhak Ben-David, an Ohio State University associate professor who has studied the impact on Amazon of recent e-commerce sales tax implementations in five states. About 20 percent of defectors will make their purchases from competing e-tailers while 2 percent will buy from local brick-and-mortar stores, he told the Tribune.

But Neil Stern, senior partner at retail consulting firm McMillanDoolittle, believes the customer defections will be minimal, given Amazon’s competitive pricing, high level of customer service and the benefits of its Prime membership program, the newspaper said.

Illinois estimated that $212 million in potential state sales taxes went uncollected from e-commerce transactions in 2013.

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