Shop Amazon Now Pay Sales Tax



By Amanda Compton-Ortiz

The United States’ number one online retailer’s sudden start of collecting sales tax in Mississippi has some wondering why and others making a wish list of what to spend the new income on.

The increase, according to reports in The Clarion-Ledger, is expected to happen for the state’s 2018 fiscal year after online sales giant Amazon has voluntarily agreed to start collecting a 7 percent tax on Mississippi sales and returning it to the state.

Amazon began its collections of what is technically called a “use” tax for Mississippi on February 1.

Olive Branch resident April Smith Carpenter said she hopes the state will “put this new revenue to good use.”

“I hope they keep the activity teachers in the public elementary schools, such as music, physical education, art, and computers.”

Carpenter, who shops as an Amazon Prime member along with her husband about 4 to 6 times per month, also added that the tax will not discourage her from being an Amazon shopper. “I rely on the convenience of this service,” she said.

The Amazon Prime is a $ 99.00 yearly membership that gives shoppers free two day shipping on some items and other perks.

Olive Branch resident Tiffany Harris said despite the tax collections she also plans to continue making regular, weekly purchases through her membership with Amazon Prime. “The tax implications won’t affect my shopping habits,” said Harris. “I use Amazon not just for the pricing benefits but for convenience as well. I love two-day delivery. “

Southaven resident and Amazon Prime member Amanda Woods feels the same.

“Adding the sales tax to orders will not deter me from ordering from Amazon,” Woods said. “My main point in using them is the free, quick shipping and a little extra tax won’t change that.”

Senatobia resident LaJuan Tallo said she doesn’t feel the tax charge will make her shop “any more or any less” on Amazon. “If I were to shop in a store I would pay sales tax, so it doesn’t bother me to have it added to my online purchases.”

But not everyone agrees, Bill Johnson of Southaven wonders if it will be worth the headaches of dealing with online shopping.

“As a Prime member I pay 99 dollars a year to get the “free shipping” and now with the tax, my prices will be closer to just running to the local store and have it today”.

“Why would Amazon just do this without it being a state mandate? Sounds fishy.” They must be making some money doing this some how.

The state’s Department of Revenue Commissioner Herb Frierson told The Clarion-Ledger that the tax is expected to increase the state’s budget anywhere between $15 and $30 million a year.

According to reports, Mississippi is among approximately 39 states where Amazon has started collecting sales tax from customers.

Amazon has already made the announcement on its Web site, stating “Items sold on and shipped to certain states may be subject to tax.”

Amazon further states that the amount of tax charged on orders will be calculated on the total selling price of each individual item and will depend on many factors including “identity of the seller, type of item purchased and destination of the shipment.”

The site also outlines specific tax regulations for the sale of cell phones and other electronic devices like tablets or mobile hot spots that use wireless service.

Southaven resident Pam Hale, who shops on Amazon a few times per month, agrees.  “The only affect is would have on me would be, can the product be purchased locally for the same price? If so, I would purchase locally if the product is needed immediately.”

 Hernando resident Claire Nelson Hick said while she is not thrilled with the tax she too will continue to shop on Amazon.

“I do understand the logic imposing the sales tax,” she said. “Unilaterally, I oppose legislation that imposes additional taxation on families, but most items our family buys on Amazon are items I would have purchased locally and paid sales tax if Amazon didn’t offer free and quick shipping making it more convenient for us.”

 Amazon voluntarily stepped forward to collect Mississippi sales tax as the department filed in mid-January to implement an “administrative rule” that would require all companies making more than $250,000 in annual sales in Mississippi to collect the sales tax and remit to the state’s treasury, whether they sell by internet, paper catalog, or both.

Lawmakers say enforcing e-retailers to pay taxes also puts them on a more level playing field with small business owners who already charge and collect sales tax.

Southaven resident Ginger Adams said she fully supports this notion.

“The mom and pop stores are required to collect and pay sales taxes on items sold.

“I don’t like taxes anymore than most but currently Amazon and other online retailers do not have this requirement. I believe this is a disadvantage to local mom and pop stores.”

Adams added she believes that while “we all benefit from the state being financially solvent,” perhaps the state should be looking into additional ways to raise revenue.

If the rule completes the review process, companies would be required to start collecting on July 1. And if they do so voluntarily, they would be omitted from having to undergo a three-year audit by the treasury department.

Some state officials have estimated levying sales or use taxes on online sales would net the state about $300 million a year, according to reports.

This use tax, according to lawmakers, has been on the books for years but never before enforced among online sellers. And enforcing the tax now, officials say, is not equivalent to adding a new tax simply because state residents are not paying it.

According to department officials, the tax is not legally classified as a sales tax because it does not return the 18.5 percent share that individual cities would normally receive from local sales within their borders.

Donnie Abernathy with the DeSoto County Conservative Coalition said,

“As Conservatives we have to challenge calls for additional tax revenue by all levels of government. Do they need additional revenues to simply maintain the status quo or is there an underlying attempt to grow and expand government?”

“Out of control government growth is a beast that must be fed, constantly.”

Rep. Trey Lamar, R-Senatobia, told the Jackson Free Press that Mississippians are saving money by ordering online and not reporting their use tax in April on their returns. Folks shopping online don’t have to drive and physically walk into a store and shop which in turn is costing the state money in actual sales tax revenue.

A University of Tennessee study has estimated that between 2009 and 2012, Mississippi lost about $616 million in state, local sales tax and use tax due to e-commerce, according to reports