Amazon Will Start Collecting Sales Tax In More States This Spring

Amazon Will Start Collecting Sales Tax In More States This Spring

Amazon has already been collecting sales tax in many U.S. states after the backlash of state officials for their tax revenue losses. It appears as though Amazon may also be bowing to pressure from another U.S. state with it being added to the list.

According to a report by the Albuquerque Journal, Amazon will now be collecting sales tax in New Mexico starting this spring in April. It is unclear at this time if this move by Amazon is the result of a deal with New Mexico officials or if they simply decided to do it on their own.

Since online shopping began, retailers like Amazon have been in a rapidly growing business market in recent years. That also means that the amount of dollars spent on simple retailer goods has decreased in the standard brick and mortar stores and exponentially increased with online retailers. Amazon is the one online retailer that has been leading the charge nearly from the beginning and they have grown to enormous sizes over the years.

With Amazon’s additions of online video services, online music sales, and yearly Amazon Prime subscriptions, they have emerged as the most dominant online retailer platform in the world and have expanded their sales tools to enormous proportions.

The online technology sector has given Amazon all of the tools it needs to grow even bigger and potentially put several brick and mortar stores out of business. Wal-Mart is also one of those potential victims of Amazon. They have already felt the pinch of what Amazon has done across the country and taken away business from their local customers.

A lot of localized businesses across the country have expressed similar outrage because they have to compete with Amazon, an online retailer, who can sell their products cheaper since they don’t have to charge sales tax. Some might think that is negligible, but when it comes to higher end items like sporting goods and anything over $100, that can be up to a $10 difference for the consumer.

In this day and age, most consumers option for lowest price within reason, with convenience factored in. If someone is a subscriber to Amazon Prime, then that person already has free 2-day shipping, so he/she might option for an Amazon purchase over a local store purchase due to the price difference.

The spirit of that kind of competition might be changing now with Amazon starting to charge sales tax in the state of New Mexico. That is not something new for many other states as well that have already been getting sales tax added on to their Amazon purchases in recent years like Indiana.

Officials in New Mexico estimate that the sales tax by Amazon will bring in millions in tax revenue for the state and might even give them an advantage with their budget plans. Again, there has been no word yet as to why Amazon has made this change. But one theory might suggest that Amazon could be opening a Fulfillment Center in the state, which would force them to take the action of adding a sales tax to all sales in New Mexico.

That is something that Amazon had to do when they added a Fulfillment Center in Denver when they started charging sales tax in the state of Colorado. As a matter of fact, there are now 41 U.S. states that Amazon is currently charging sales tax in as well as the District of Columbia.

In all, this could be a sign that Amazon is taking the early steps to comply with state laws before they start opening stores or distribution centers in various regions across the U.S. There has already been talk about Amazon bookstores expanding as well as grocery stores.

[Featured Image by David McNew/Getty Images]

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