Amazon to start collecting sales taxes in New Jersey in 2013

In a recent announcement, the state of New Jersey has revealed that it will begin collecting sales taxes from citizens who order products from Amazon.com. Additionally, New Jersey has also announced Amazon will open two distribution centers in the state.

The new sales tax will not go into effect until July 1, 2013, according to the state's press release. The terms of the agreement and the impact it will have on the state's operations are as follows:

According to the agreement between the New Jersey Division of Taxation and Amazon, the company will voluntarily begin to collect and remit New Jersey sales tax by July 1, 2013, or as of the effective date of federal legislation concerning state sales tax collection from out-of-state retailers, whichever is earlier. This means New Jerseyans will no longer have the required responsibility of tracking and reporting use tax owed on their online purchases from Amazon, and the State will receive the sales tax it is due to fund programs and services for its residents.

Two distribution facilities will help bring additional jobs to the state, including 1,500 permanent positions. Amazon will begin construction on the new distribution facilities next year.

Amazon has previously agreed to begin applying a sales tax to orders placed in Texas, according to the Houston Chronicle. The sales tax will begin being collected in Texas on July 1 of this year. Other states and the federal government have also been attempting to create legislation that will force Amazon and other online retailers to begin applying state sales taxes to online transactions in an effort to even competition with bricks-and-mortar retail outlets.

The online retailer currently collects sales taxes in Kansas, Kentucky, New York, North Dakota and Washington. Additionally, Colorado, Oklahoma, South Carolina, South Dakota, Tennessee and Vermont residents may or may not have to pay sales taxes on Amazon.com purchases depending on the items purchased and state tax laws.

Via: CNET News
Source: The State of New Jersey

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27 Comments

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Mainer82 said,
Even with taxes applied upon purchase, Amazon/New Egg is still cheaper than big box stores for the most part.

B&M stores; yes.

Other e-tailers, no.

Any deals on Newegg are basically the same price on Amazon, which is on average $5-10 cheaper than other e-tailers.

With tax? Hah.

This means New Jerseyans will no longer have the required responsibility of tracking and reporting use tax owed on their online purchases from Amazon

Wait, so is that saying that buyers were supposed to be tracking their purchases, figuring out the taxes and then remitting payment for purchases from Amazon to the state, or maybe any purchases online that were not taxed?

xendrome said,

Wait, so is that saying that buyers were supposed to be tracking their purchases, figuring out the taxes and then remitting payment for purchases from Amazon to the state, or maybe any purchases online that were not taxed?

That is exactly what they are saying and why this is being done. Its closing a tax loophole.

I find it amusing how many people think this is so completely and utterly wrong... everyone was supposed to pay this tax all along, everyone has just avoided (illegally) paying it all this time.

It doesn't matter what excuse you had previously, (eg. can't be bothered to do tax returns), no one can claim this to be "wrong", it's just closing a loophole that's been open far too long.

People wonder why the US government has a debt, people avoiding tax isn't going to help the issue.

MASTER260 said,
DAMMNIT, I LIVE IN NEW JERSEY & TURN 18 THIS YEAR! I DON'T WANAA PAY NO DAMN TAXES!

Perhaps you will also learn that all caps is akin to yelling LOL. Or your caps lock was stuck...

I live in NY and I dont pay sales tax on most things from amazon. One of the main reasons I shop there is because of no sales tax. But I think states should just create a separate sales tax to apply to online shopping (a smaller one) and make it universal. Applying it just to Amazon seems ridiculous and unfair.

Shea J said,
I live in NY and I dont pay sales tax on most things from amazon. One of the main reasons I shop there is because of no sales tax. But I think states should just create a separate sales tax to apply to online shopping (a smaller one) and make it universal. Applying it just to Amazon seems ridiculous and unfair.

Won't be too complicated either. Online retailers wouldn't even have to be responsible for it. The tax could be added to credit card purchases since that is what you would have to use anyway to buy anything.

ILikeTobacco said,
The tax could be added to credit card purchases since that is what you would have to use anyway to buy anything.

Right.. because Paypal doesn't exist..

DAOWAce said,

Right.. because Paypal doesn't exist..

And how do you get to your funds on paypal. Either way, I consider paypal a sort of banking service anyway. It is basically just a glorified debit account.

ILikeTobacco said,
And how do you get to your funds on paypal.

Via an actual bank account, not a credit card, not a debit card.

The only thing you can do with a credit/debit card on Paypal is make secure purchases; the site you're purchasing from has no idea about anything other than it being a Paypal payment, meaning it would be Paypal that charges the tax, not the website in question.

Not everything is as simple as you might think.

Oh this is just great.

I already suffer enough with Newegg tax and now I'm going to be hit with this from Amazon, of which I'm a semi-regular buyer from (mostly non-perishable food, funny that).

With tax, deals are going to become pointless yet again and further run my limited finances into the ground. Will probably be less expensive to just buy at grocery stores now since there's no tax on food there.

Way to go state, just screw us over even more.

Need to see if there's any petitions about this..

DAOWAce said,
Oh this is just great.

I already suffer enough with Newegg tax and now I'm going to be hit with this from Amazon, of which I'm a semi-regular buyer from (mostly non-perishable food, funny that).

With tax, deals are going to become pointless yet again and further run my limited finances into the ground. Will probably be less expensive to just buy at grocery stores now since there's no tax on food there.

Way to go state, just screw us over even more.

Need to see if there's any petitions about this..

Are you really complaining that Amazon is now adding the tax that you were suppose to previously have been paying anyway? You realize you are openly admitting to tax fraud right? This is not adding a new tax. It is charging the tax at the time of purchase instead of making you report it at the end of the year. There is no added cost to this. It doesn't make it any more expensive because you were suppose to be have been paying this tax all along unless you are committing tax fraud. If you are honestly complaining about this, you no longer have the right to complain about rich people not paying their fair portion of taxes because you yourself don't pay what you are suppose to.

"This means New Jerseyans will no longer have the required responsibility of tracking and reporting use tax owed on their online purchases from Amazon, and the State will receive the sales tax it is due to fund programs and services for its residents."

I don't do tax returns and never have for my whole life, so hearing someone claim I'm committing some fraud is moot.

Regardless, realistically, who's going to be OCD enough and have enough time to record all of their online purchases? Very very few people. I'd be incredibly surprised if you actually record and report all your online purchases.

Also, did you miss the point where I said I mainly buy food from Amazon? Food is tax exempt. How they're going to manage their system to ignore taxes on food, or if they're going to be improperly taxing food, is something I/we need to find out.

Considering your username, lack of an avatar, and your tone, it looks like I probably shouldn't have even bothered responding to this, but I did.

DAOWAce said,
I don't do tax returns and never have for my whole life, so hearing someone claim I'm committing some fraud is moot.

Regardless, realistically, who's going to be OCD enough and have enough time to record all of their online purchases? Very very few people. I'd be incredibly surprised if you actually record and report all your online purchases.

Also, did you miss the point where I said I mainly buy food from Amazon? Food is tax exempt. How they're going to manage their system to ignore taxes on food, or if they're going to be improperly taxing food, is something I/we need to find out.

Considering your username, lack of an avatar, and your tone, it looks like I probably shouldn't have even bothered responding to this, but I did.

The fact that you judge me based on my username alone means it did its job. I don't smoke nor will I ever be able to due to health problems. Good job proving that your just another person on neowin that thinks your better than everyone else and knows it all. Assumptions make you look stupid btw. Lets play that game. I am going to assume the reason you don't do tax returns is because you are part o the crowd that has lived on welfare his entire life and lives off of the taxes that I pay. See what I did there? I assumed you are another useless person in this country. The reason I don't assume that is because I don't know anything about you. Lack of avatar means what exactly? Didn't realize we had to load an avatar to be allowed to post on the site.

Yes, I do report all my online purchases. It isn't that hard. If you aren't an idiot, you don't try to figure out what you bought until the end of the year. If you aren't an idiot, you record them as you buy them and do proper book keeping. Are you saying its not fraud because you don't report your income every year. So instead of fraud, it's tax evasion. That is so much better. Sorry, I'm not on the "stick it to the man" bandwagon. I work, pay my taxes, and don't think I am somehow better than everyone else and don't have to do whats legally required.

And before you say you don't make an income, even someone who makes $0 a year is required to do their taxes at the end of the year. The only reason the IRS won't say anything is because it would cost more than it is worth. Everyone is required to file taxes in some form, even newborns. They are filed as dependents. Regardless of what your excuse is, its technically not legal. If it is a legitimate excuse, its probably not worth the IRS coming after you for.

DAOWAce said,
Also, did you miss the point where I said I mainly buy food from Amazon? Food is tax exempt. How they're going to manage their system to ignore taxes on food, or if they're going to be improperly taxing food, is something I/we need to find out.

Same way the grocery store taxes you on a bottle of laundry detergent, but not on groceries.

It's called "programming."

TomJones said,

Same way the grocery store taxes you on a bottle of laundry detergent, but not on groceries.

It's called "programming."


Amazon already has enough mislabeling problems as it is. I do not see any way they'll be able to accurately and selectively choose items in their inventory as being tax exempt; there are way too many food products in their inventory.

Sure, things can be done via outsourcing or requiring sellers to list their products as food, but that isn't going to solve the mislabeling issues.

I just honestly don't see how this is going to be done.

I don't mind paying my sales tax, but I think the states need to sit down and come up with a uniform sales tax framework to make this simple for internet merchants. Otherwise they are creating a punishing situation for large internet retailers where they charge tax, but their smaller competition does not.

If they made it as straight forward as the USPS or UPS does for rate information it could really be great for businesses online.

Frazell Thomas said,
I don't mind paying my sales tax, but I think the states need to sit down and come up with a uniform sales tax framework to make this simple for internet merchants. Otherwise they are creating a punishing situation for large internet retailers where they charge tax, but their smaller competition does not.

If they made it as straight forward as the USPS or UPS does for rate information it could really be great for businesses online.

It's a bizarre situation when in ever other country taxes are collected as normal. Tax avoidance shouldn't be tolerated.

Frazell Thomas said,
I don't mind paying my sales tax, but I think the states need to sit down and come up with a uniform sales tax framework to make this simple for internet merchants. Otherwise they are creating a punishing situation for large internet retailers where they charge tax, but their smaller competition does not.

They already have. Or at least, 24 states participate in the Streamlined Sales Tax Project. One of these states happens to be New Jersey.

This suggests an obvious solution, doesn't it? A state can opt to collect sales taxes on Internet purchases -- but only if it opts into streamlined sales taxes. If a state wants to stick with its old tax system, they can feel free to do so -- but then they also have to stick with the old state of affairs in which it doesn't collect sales taxes on cross-border Internet purchases.

But legal matters rarely are this simple. For example, Texas and New York do not participate in streamlined sales taxes -- but they're also the two most populous states after California.

Did my taxes this year. Accountant wanted to know how much money I spend online so he could write it off on my return. SUCKS!

Quick Shot said,
Did my taxes this year. Accountant wanted to know how much money I spend online so he could write it off on my return. SUCKS!

consider getting a new accountant