Amazon To Start Collecting Sales Tax On Goods Shipped To Pennsylvania

To kick off the weekend, Amazon will be collecting a 6% sales tax on orders shipped to Pennsylvania starting on Saturday, because of a state directive that requires it do so. A spokesman said that despite the fact that the company had fought the sales tax, Amazon had to reverse its position to comply with the state.

But don’t let that scare you off from Amazon, begs Amazon.

“We believe that customers (in Pennsylvania) will continue to come to Amazon because we offer the best prices with or without sales tax,” said the spokesman, Scott Stanzel.

Other states where Amazon collects sales tax include Kansas, Kentucky, North Dakota, New York, Texas and Washington. California will be added to that list on Sept. 15 as well. Amazon believes anything involving taxation of e-commerce should be handled by federal legislation that across the board lets the states decide for themselves, noted the spokesman.

There are six fulfillment centers in Pennsylvania, which is why the state insisted that it could collect sales tax — because Amazon has a physical presence within the state.

Amazon.com to begin collecting sales tax in Pa. [Associated Press]

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  1. bnceo says:

    I honestly think the reason Amazon reversed it’s position is because they want to set up distro centers everywhere and make shipping even faster. Prime get 1 day shipping. Regular is two day. Even more reason not to go to a brick a mortar. Especially if the B&M stores don’t hire experts in the products they sell.

    • pecan 3.14159265 says:

      There’s an article from Wired, I think, that speculates Amazon is chipping away at the last advantage brick and mortar stores have, which is time. Since Amazon is looking at implementing same-day delivery, it will probably start setting up more distribution centers in various high-population areas.

      • RedOryx says:

        That would be amazing. I’ve used Amazon since the late 90s and there is so much I like about the company that sales tax would, in no way, be a deal breaker for me. Not if it meant getting items quicker than I already do (hello Prime)

        • Bor&Mitch says:

          Depends. If you were buying an $800 TV, would you be willing to pay 6% sales tax ($48) for benefit of same day delivery, or would you wait a week, not pay the tax from a different internet retailer who also offered free shipping?

          Amazon’s quick shipping advantage is tempered by the fact that many other internet shops are still not charging sales tax. Until they all do, Amazon is going to take a hit especially on the sale of big ticket items.

          • RedOryx says:

            That’s a poor example for me, as I’m not likely to purchase large electronics online. I’m too paranoid about problems during shipping, so regardless I’d be paying sales tax as I’d make the purchase in person.

          • JEDIDIAH says:

            Amazon is cheap and reliable to the point where I would trust them MORE than just about anybody. Prime shipping runs like clockwork and makes dealing with any other retailer seem much more bothersome.

            $4 overnight shipping is hard to beat.

            Amazon beats out other retailers based on the entire quality of the experience. I think conventional retailers in for a rude awakening if they think these tax changes will change anything for them.

          • bgoldtone says:

            You are absolutely right!

            I have purchased untold items on Amazon over the last 2 years to the tune of big money. I was very pleased not to pay sales tax, especially since all states in my opinion are criminally negligent in how they waste tax dollars. Now I am outraged that any future purchases from Amazon will now be taxed.
            If you are a casual buyer, this is a non-issue. However, if you are a power buyer like me (not rich mind you, just buy most items from Amazon I would otherwise buy elsewhere) then this adds up to a lot of money in taxes, that could otherwise be better spent on purchasing products to actually help spur the economy!

            I will probably buy some items from Amazon in the future that are dirt cheap but from now on for any high ticket items I will shop elsewhere.

            Thanks to the state of Pa and thanks Amazon for giving me one less method of staying ahead of the inflation curb!

      • CalicoGal says:

        As a thrilled Prime customer, I would TOTALLY pay Maryland sales tax (6%) for same-day/next day shipping!!!

    • rugman11 says:

      One of the great things about living in Kansas is that we pretty much get two-day shipping already without having to have an Amazon Prime subscription. Pretty much any books, movies, or games we order come straight from the distribution center about two hours away.

  2. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    I live in PA, and I order a few items from Amazon from time to time, and I’m glad Amazon will start adding sales tax to the order.

    This will save me from having to keep track of my purchases, figuring out what’s taxable and what isn’t, and remembering next year that I have to pony up $10 to the Commonwealth.

    • fizxman says:

      Wow, you really did that?

      • YouDidWhatNow? says:

        Shocking that someone would actually comply with the law, isn’t it?

        The fact that 99.99% of all Americans didn’t comply with that law doesn’t mean that the law didn’t have to be complied with. It meant that 99.99% of all Americans are criminals. By the very definition of the word.

        For the record, I haven’t paid use taxes either. But I’m not stupid enough to pretend that I wasn’t required to do so, like the rest of you.

        • axhandler1 says:

          Always reminds me of that Scott Adams quote: “In the future, police will have the technology to catch 100% of the criminals. Unfortunately, we’ll realize 100% of the population are criminals, including the police.”

        • lvdave says:

          It kinda tells ME that if 99.99% of Americans didn’t comply with the “law” that that law is full of it..

          • YouDidWhatNow? says:

            Nice. What it actually says is that people are happy to break the law when they’re essentially positive they won’t get caught. There’s nothing wrong with the law itself…it’s just almost impossible to enforce.

            Nice how you think that you get to just ignore whatever laws you don’t agree with. Here’s your sign.

            • MMD says:

              You admitted above that you don’t comply with the law, either. Are you really in a position to be as judgmental as you’re being?

              (I’ve asked you before, I’ll ask you again. Why is every post I’ve ever seen from you so, so angry?)

              • YouDidWhatNow? says:

                I’ve admitted that I don’t comply as well, as you noted…but everyone else seems to be married to the idea that they’re not “required” to comply with that law, or that the law is unconstitutional, or some other BS.

                That is a mockable position to take. Therefore, you deserve to be mocked…and I’m more than happy to mock you for taking a mockable position.

                If you think I’m angry, that’s fine…but I can assure you I’m perfectly happy while pointing out irrefutable truths to people who are too stupid to accept them.

                • You Can Call Me Al(isa) says:

                  Well, what mockable position are you taking for not paying use taxes?

                  • YouDidWhatNow? says:

                    You tell me. If you want to mock me for knowing I *should* be paying use taxes, but didn’t, then go right ahead.

                • MMD says:

                  And where, exactly, did you see me take a position? (Hint: I didn’t. You assumed.) Also, as I stated elsewhere, your facts are correct. I’m fully aware of what the law states.

                  I just don’t understand why you’re being so self-righteous about a law that you yourself have stated you don’t abide by. But by all means, deflect that question and rage impotently about it on the internet if that’s what makes you happy.

                  • YouDidWhatNow? says:

                    “I just don’t understand why you’re being so self-righteous about a law that you yourself have stated you don’t abide by.”

                    I’m not being self-righteous about it. I know I’m not following the rules.

                    I’m making fun of the people who insist on erroneously believing that they’re *not* required to follow those rules.

                    I like making fun of irrational people. It’s fun. And a lot safer on the internet, because when you point out someone’s irrationality the them in real life, they are often apt to just punch you than admit they’re wrong. Irrational people can frequently just get violent when their irrationality is demonstrated and they find no way out.

                  • wombats lives in [redacted] says:

                    To find a mate, the troll must spam as much, as quickly as possible, in hopes of attracting attention. They try to immediately, insult and put others around them down, to make up for their short comings. They start to believe their delusions and will continue to fling shit about as they know, no intelligent way to converse.

                    • YouDidWhatNow? says:

                      …so what is it that I’m delusional about?

                      You seem rather butthurt. And as for “intellegnet way to converse,” you might want to check your grammar once in a while.

                    • wombats lives in [redacted] says:

                      @youdidwhatnow

                      If you’re going to go the grammar nazi route, you should at least, be grammatically correct. Sentences should not start with “and,” and you should get the spelling correct, when doing quotes.

                      /eat up

                    • YouDidWhatNow? says:

                      Wow. Some anger management issues there, pal.

                      A typo is a typo…not knowing how to use a comma is borderline illiteracy.

                      Cripes, I think you should think about switching to decaf.

                • wombats lives in [redacted] says:

                  What’s mockable is your poorly composed logic, and the deficiency of attention you must have received in life.

                  /feeding the troll

                  • YouDidWhatNow? says:

                    OK, I’ll bite…how is my logic poorly composed?

                    And thanks for the concern, but I’ve gotten all the attention I care to have had in my life.

          • luxosaucer13 says:

            Drawing out your logic further, I guess that means you believe speed limit laws are “full of it,” too, because a majority of drivers don’t comply with that one either.

            I’ll make sure and come and visit you when you get arrested for going 60 mph in a school zone.

            /s

            • JEDIDIAH says:

              Most speed laws are about revenue and have nothing to do with safety. The fact that you can find the odd exception doesn’t alter this.

              A simple “don’t be a jerk” heuristic works far better than any posted speed limit.

        • dolemite says:

          I won’t say I don’t do the same, but…I’m buying an item from another state, from a vendor that has absolutely nothing to do with my state, and the transaction is made outside of my state (on a server somewhere). Now…why does my state think they are entitled to this money again?

          • YouDidWhatNow? says:

            Commerce is taxable.

            Since you didn’t pay sales tax at the point of sale, the laws of your state specify that you are required to pay use tax when you file your return.

            You can argue the philosophy all you want…but the state is entitled to the use tax because it’s the law.

            • dolemite says:

              The list of laws I don’t agree with could fill a room.

              • YouDidWhatNow? says:

                Me too.

                And if we want to keep piling on the laws I frequently don’t follow, I speed a lot too.

                But I know speeding is against the law, and I’m not going to argue with the cop about whether or not I’m required to abide by that law, or whether or not the state is entitled to enforce it.

            • ShopSnake says:

              Philosophy my ass. As far as i’m concerned, if the state wants my money, they better send me a goddamn bill. I’m not auditing my own purchases all year long. That’s just stupid. People have enough going on in their lives without keeping track of their internet purchases and which stores charged them sales tax or not. Pretty much nobody does it and nobody cares. It’s just that simple. You better believe I’ll be using NewEgg more and Amazon less now.

          • MaxH42 needs an edit button says:

            Let’s approach it this way: which state do you think is entitled to tax your transaction? If sales tax can be avoided simply by ordering from an entity outside your state, then there could (and most certainly would) be “storefronts” that claim to be just middlemen where you could buy items shipped from another state, thus avoiding taxes.

            • YouDidWhatNow? says:

              Yeah…in theory, eventually sales tax revenue would evaporate and the states would implode from lack of funds.

              Likely? No, not really…but the premise is correct. States need tax revenues to function. If no one pays those taxes, the state can’t function.

              • MaxH42 needs an edit button says:

                And basically, when you have a transaction with so many nebulous components, the most concrete one is the recipient’s address, because that is ALWAYS required to deliver tangible goods. (Also, if it was based on the state from which the goods were shipped, every company in existence would have warehouses in Delaware and Oregon, and that’s it.)

          • 85% Real 15% Filler says:

            Probably because Amazon has a distribution center within the state. If they shipped it through another company there would be more of a grey area.

        • MMD says:

          While your facts are correct, you don’t get to be that sanctimonious unless you actually comply with the law.

          • YouDidWhatNow? says:

            …is that a law somewhere? Or are you just upset with me because I’m pointing out the error of your ways?

        • cspschofield says:

          The fact that 99.99% of the citizenry did not pay the tax indicates that any members of the Political Class who thought that they would were suffering from serious brain damage. The Political Class has evidently never heard the adage that you should not give orders that you know will not be obeyed.

          If you cannot collect a tax, then levying it in the first place is an exercise in thundering idiocy.

          This is why I have never favored a National Sales Tax; the dread that the buttinskis would try to make sure that it was collected on Yard Sales, spawning yet another totally out of control agency to invade the business of the citizenry.

        • snarkymcfarkle says:

          And now your criminality is in writing. I’m calling the cops to beat you down.

          • YouDidWhatNow? says:

            Just send them to any house in America. Virtually no chance they won’t find someone who didn’t pay their use taxes. Your house, for example…

      • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

        Yes, I try to be honest with tax things as the consequences for me as a little serf person can be pretty steep.

        PA just added this little line to the PA-40, and yes, we’re supposed to do this. I didn’t last year because I missed it when I filed my taxes, but I think I only shorted them less than $2.00, so I doubt Johnny Law will hunt me down over that.

        I fully intended to comply next year when I file my 2012 taxes, and then I lost track of a few things (bad record keeping). Maybe over the weekend I can figure it out :)

    • backbroken says:

      Good morning, Governor.

  3. MBZ321 says:

    I was wondering how long it would take for this to happen….the distribution centers have been around for several years now.

  4. MaxH42 needs an edit button says:

    I wonder if they’ll be able to exempt nontaxable food items in states that don’t tax grocery food purchases.

    • MPD01605 says:

      They’ll have to, because I don’t think they can legally collect tax on a nontaxable item.

    • exit322 says:

      I would suspect their matrices will be able to put together what’s taxable and what’s nontaxable based on the location input.

  5. benbell says:

    FFUUUUUUUUUUUUUU

    I like my sales tax free purchases! Especially when I am ordering large pieces of furniture.

    • YouDidWhatNow? says:

      …but of course, because you’re a law-abiding citizen, you always paid use tax when you didn’t pay sales tax at the POS right?

  6. Overheal says:

    I think it’s kind of sad that they’ve been operating their business model on tax evasion, so it’s good to see them wising up. If it means 1-day or even Same Day Shipping, then good for them but they should have done that anyway. It’s ironic how regulations push companies to do interesting things.

    • YouDidWhatNow? says:

      No internet company was ever operating their business model on tax evasion. They were never required to collect sales tax. Period.

      The tax evasion was being done by the consumer, who nearly 100% of the time ignored the fact that they were required by law to pay use tax on such purchases.

      You want to know who to blame, look in the mirror.

      • Extended-Warranty says:

        Amazon has always thrived on tax evasion. Have you not paid attention to the last few years?

        • YouDidWhatNow? says:

          Amazon was never required to collect tax. Have you not paid attention to the law of the land, as it has been for the last several decades?

          • Michael Belisle says:

            I agree that you can’t really blame Amazon here. It’s not just the law of the land that they don’t have to collect state and local sales tax, it’s the law of the land that the states can’t force Amazon to collect taxes unless they have a physical presence in the locality. You can thank them dirty activist judges for that. (Congress is free to act, however.)

            I agree that it should be left up to the states (since it’s their tax, after all), rather than forcing them to collect tax at the point of sale. But the status quo is the opposite: they are effectively barred from collecting taxes directly.

            • Skyhawk says:

              Without a physical presence in a state, what services does that state provide to them in exchange for those taxes levied by that state?

        • JEDIDIAH says:

          I must have been living on a different planet than you.

          On my planet, Amazon was thriving based on superior price and selection and very predictable shipping.

          Being some sort of “tax scofflaw” had squat to do with it.

      • Velvet Jones says:

        Actually, in this case they were. Under PA law if you have operations in PA you have to collect sales tax. QVC has been doing it for years, as they have operations here. A couple of other mail order/internet sites do as well. I always wondered how Amazon got away with not doing it. Still, it sucks. I will have to switch back to New Egg or Tiger Direct for certain purchases. And no, I don’t pay taxes myself. If they want them, come and get them. Otherwise PA can f*ck off.

        • YouDidWhatNow? says:

          Amazon had been trying to argue, with various levels of success in different states, whether or not their distribution centers fell within the parameters of the required presence in the state to collect sales tax.

          They actually left TX when they lost that argument…which was the one and only correct course of action, granted that they didn’t want to have to collect sales tax in TX. If you don’t like the laws that apply in a given area, you don’t get to ignore them…but you can choose to leave.

          • Michael Belisle says:

            And then they settled with Texas, made plans to open up a new distribution center, and presumably started collecting taxes in July.

            Which really, for Amazon, it’d be foolish not to have a distribution center in a giant state like Texas. And for Texas, a state without an income tax, I can see why they’d want to collect sales taxes directly from large retailers like Amazon.

    • bnceo says:

      They haven’t been evading taxes, just following the law of the land. Which has not caught up to the current climate because the geezers in Washington don’t know any better.

      • YouDidWhatNow? says:

        The law of the land is fine. It’s just that ~100% of all online consumers ignore it and don’t pay the use taxes they are required to.

    • RedOryx says:

      It’s not tax evasion. I sell online and am only required to collect sales tax from those living in the same state as where I’m located (Ohio). It’s not tax evasion if I’m not collecting from those in, say, California. The onus is on those buyers to pay the use tax.

      • YouDidWhatNow? says:

        Exactly. I sell computers to customers in various states other than my own.

        I don’t collect sales tax for any states other than the state I live in, because that’s the law.

        My customers in those other states are required, by law, to pay use taxes on the stuff I sell to them.

        Amazon (and all online vendors) are exactly the same. Just on a much larger scale.

        • RedOryx says:

          Yup, I sell on Etsy and have never sold to someone in Ohio, but I have it set up to in case it happens. In the meantime, I just pay the $0 sales tax each time on that license. Then I have a second license for craft shows. Those are located in my state and I do charge and file the appropriate sales tax.

          The only thing different between my very little shop and Amazon with regard to taxes is the fact that I’m little and they aren’t. The laws are the same.

  7. YouDidWhatNow? says:

    The collection of sales tax by online vendors won’t make the slightest difference in consumer preferences, despite the incessant whinings of B&M stores.

    The math is pretty GD simple: if an item is 20% cheaper online (where POS sales tax isn’t collected) vs. in a B&M store (where POS sales tax is collected), it’s still 20% cheaper online when the same amount of tax *is* collected at the POS.

    Ergo, it makes no f%cking difference. All drivers of consumer happiness are *still* in the favor of online vendors, except for the one-and-only advantage B&M has over online: instant gratification.

    Every other function of the consumer experience always has been, and always will be, in the favor of online vendors. Customer service, selection, prices (with or without tax), convenience, lowest-cost-to-shop (don’t have to spend time or gas money to get there), so on and so forth. All irrevocably in the favor of online vendors.

    B&M has to figure out how to exploit instant gratification as much as they can. It’s all they have…and they don’t realistically have any way to affect any of the other factors.

    Tax is irrelevant.

    • Extended-Warranty says:

      Tax isn’t the sole factor, but it’s definitely a huge one. You obviously have no idea what you are talking about. Have you ever even seen a tax-free weekend? It’s chaos. You can drop a TV 20%, but few know what the “normal” price even is. When you drop the tax, it triggers this mental madness that this is a deal of a lifetime. Some customers will purchase in the next county even if it means 1% less in sales tax.

      20% cheaper prices is also a complete fabrication. On some accessories, absolutely. I can’t find the articles right now, but compared to say Best Buy, Amazon is overall only a few percent cheaper. Add in sales tax, and the discount becomes irrelevant. Or even consider that some products are more expensive at Amazon, like say, the iPad.

      Again, sales tax is not going to put Amazon out of business. To think it has no effect shows how blind some people are. Amazon is probably going to feel it most with larger purchases, the biggest driver of their revenue. Currently, it is extremely beneficial to buy your laptop or TV online to save a huge chunk.

      • castlecraver says:

        Where can you get a TV tax-free at a B&M? I don’t think I’ve ever lived in a state with one, I thought those sorts of tax holidays were generally for school supplies, back-to-school clothing and such?

        • YouDidWhatNow? says:

          The “tax-free” is a bogus advertising gimmick anyway…there are no such things as holidays from paying state taxes. The retailer simply gives the consumer a discount in the amount of the sales tax, and still sends the sales tax to the state.

          Just a different way of giving a discount. And because people hate paying taxes, the psychological effect can be wildly irrational.

          • YouDidWhatNow? says:

            …although I did just learn that there are some *actual* tax-free weekends in some states as you described…and yes, they appear to be generally for just clothing and back-to-school stuff.

            Outside of those special, extremely limited events, my above statement stands.

            • castlecraver says:

              Your above statement is so irrelevant, it might as well be standing next to Donald Trump.

              Apology accepted.

              • YouDidWhatNow? says:

                Irrelevant? It was precisely about the topic at hand.

                In every state I’ve ever lived in, there are no such state-sponsored “tax-free weekends.” There are, however, retailers that regularly advertise “tax-free sales” – which are as I originally described.

                I duly noted that I was ignorant of the official state-sponsored events, and noted that other than those rare events, my original post stands.

                Which it does.

                And if you see an apology anywhere in there to you, I suggest you take it and f%ck yourself with it. I sure as hell didn’t piss in your Wheaties this morning.

        • atrixe says:

          Where can you get a TV tax-free at a B&M?

          Delaware.

      • George4478 says:

        >> Have you ever even seen a tax-free weekend? It’s chaos.

        After going to the first tax holiday years ago (at back-to-school time), I would rather shop and pay the sales tax at any other time/place than do that again.

        “OMG!!!! No tax!!!! Gimme-gimme-gimme!!!”

        It was a madhouse, all for a 5% discount

      • YouDidWhatNow? says:

        I have perfect knowledge of what I’m talking about. What you’re talking about is a psychological phenomenon…the “tax-free weekend” isn’t actually “tax-free” – the retailer is giving a discount in the amount of the sales tax, and then factoring that into the total price…the tax is still going to the state.

        And 20% cheaper is most certainly not a fabrication. It’s a lot worse than that in a lot of cases, actually…and when you consider the vastly smaller selection at some stores, you don’t have the opportunity to buy the reasonably-priced stuff anyway.

        For you to assert that having Amazon et al collect sales tax will have any effect at all shows how utterly irrational some people are. The most basic arithmetic in the world still shows that it’s cheaper online. Period. Ergo, even if price is your one-and-only consideration, online still wins.

        …and then there’s all the other massive advantages online vendors have.

        Your argument is fail.

        • George4478 says:

          >>the “tax-free weekend” isn’t actually “tax-free” – the retailer is giving a discount in the amount of the sales tax, and then factoring that into the total price…the tax is still going to the state.

          What? When the State of Georgia announces their tax-free weekends, they are telling the consumers “No tax!” but going to every retailer in the state and telling them to drop their prices and pay the tax anyway?

          I don’t think so.

          • YouDidWhatNow? says:

            http://singleparents.about.com/od/taxfreeholidays/qt/GA.htm

            You are correct sir…I had no idea that any such things actually happened.

            As you can see, it’s a very limited scope of what gets sold tax-free…but I was utterly unaware of such events and apologize for my ignorance. Perhaps if I ever lived anywhere near GA I’d have known about that…

            For the record, sales of clothing are always tax-free in the state where I live.

            But my original point stands as a general rule…various retailers will advertise “no sales tax” events which work exactly as I described. Happens pretty frequently.

      • JEDIDIAH says:

        The fact that stupid people get excited over 5% or 8% just means that math education is failing in this country.

    • mikedt says:

      Gas prices make a big difference too. If I have to travel any significant distance out of my normal commute to shop at a B&M store, then I’m probably still saving money after paying for shipping.

      • Michael Belisle says:

        Man, I just moved to LA and run into this all the time. I used to live in a much smaller town, where the only avenue for many goods was shipping them. I thought when I went to LA, I’d be able to buy local. But then I ran into this persistant factor, where it’ll cost me something like $4 in gas and 30-60 minutes in traffic to drive 15 miles to this store or that.

        Hasn’t taken much for ordering online keep looking attractive.

    • Michael Belisle says:

      if an item is 20% cheaper online (where POS sales tax isn’t collected) vs. in a B&M store (where POS sales tax is collected), it’s still 20% cheaper online when the same amount of tax *is* collected at the POS. Ergo, it makes no f%cking difference.

      I see what you did there. Clever. But in reality, it does make a difference. If it’s 20% cheaper online and sales tax isn’t collected, then it’s actually something like 29% cheaper online.

      Or looked at a different way, let’s say you’re Best Buy. You have a completely justifiable legal avenue to pursue that would effectively increase your competitor’s prices by 9% across the board. Do you really think that won’t make affect shopping habits in an industry where margins are about 5% in a good year (for both Amazon* and Best Buy)?

      __
      Side note: Opening all these new distribution centers and expanding same day shipping will likely result in increased pressures on the prices Amazon charges. Just FYI.

      • YouDidWhatNow? says:

        Actually I was thinking in terms of the purchase price, sans taxes. But in any event, you’re supposed to pay use tax instead of sales tax when buying from out-of-state, soe techincally it’s still the same.

        Regardless, the fact of the matter is it’s still cheaper online…even if you manage to find the slimmest of margins. And then there’s all the other advantages online has over B&M.

        BBY, in your example, had no legal avenue to pursue at all – Amazon was following the law of the land. If there’s a 9% sales tax due that isn’t collected by Amazon, the consumer is *required by law* to pay the same 9% in use tax. It’s not Amazon’s fault that the consumer doesn’t do this. And it’s not an unfair advantage of Amazon over BBY. It’s. The. Law.

        Having said all that, again, I can see no rational way to assert that shopping habits are going to change one iota. No matter what numbers you come up with, online prices (with or without sales/use tax) will always reliably be cheaper than B&M. They simply have to be, because of the totally different cost structures at play.

        Online will always have infinitely better selection. Always be infinitely more convenient. Always have better customer service. Making Amazon et al collect tax at the POS is irrelevant…the scales don’t tip.

        • Michael Belisle says:

          What do you mean “you’re supposed to pay use tax… so [it's] technically the same”? I’m discussing reality. You’re discussing an imaginary world.

          Somehow you’re arguing that people evaluate their personal cost functions to include costs they’re not going to pay simply because they’re supposed to pay them. That’s silliness. People will, universally, evaluate it on what they will actually pay. If they’re not planning on filing use tax, they’re not going to include use tax in making a decision. So it is not “technically the same.”

        • Michael Belisle says:

          And also yes, there is research that supports the argument that collecting taxes would affect online/offline shopping habits. When it comes down to it, taxes are a variable in an economic function. It may not “tip the scales” as you say (whatever that means, online purchases were 4% of all purchases in 2009), but it affects the rate at which the scales are moving.

  8. speaky2k says:

    I don’t have a problem with this, even though I live in PA. The reason I shop at Amazon is that with everything added (shipping, tax, my time) it is still cheaper and easier to buy from them vs several local stores since I can’t always get everything I want in a single store. My biggest question is if they are going to collect taxes correctly. For instance, most clothing is tax free in PA, but there are some “luxury” clothes that are not, the same for groceries where raw ingredients are never taxed, but prepared items and things like soft drinks, but not juices, are taxed. Most of the items I buy from Amazon would be taxed no matter what, but I am just waiting to see if they get it right.

  9. sweaterhogans says:

    Wow. I get almost everything from Amazon, and I’ve been Prime since the start. I can’t believe this came out of nowhere, and right after I renewed my Prime membership. I’m afraid they will lose me as a customer.

    • ericadam says:

      Amazon doesn’t have a choice. Complain to your congressman.

    • YouDidWhatNow? says:

      I’m afraid you’re exaggerating your position.

      So instead of taking advantage of Amazon’s infinitely greater selection, better prices, shopping convenience, so on and so forth you’re going to get in the car, spend time and money to drive to a retail store, buy something at a higher price (and pay the same sales tax on it as you would via Amazon anyway), then spend the time and money to drive back home?

      Shenanigans. Amazon et al is still the obviously preferable vendor.

      • sweaterhogans says:

        I buy almost all of my stuff from Amazon because it’s convenient and usually (not always) cheaper. But for a lot of stuff that 6% will make it the same price as me going to a real store or another online store. What is the point of me paying for Prime when the product is the same price as their competitor?

        I know I may initially be overreacting a bit, but PA needs to suck it. This whole taxing things on the internet is BS. Luckily I have parents in a neighboring state and I will have to ship everything to them and bulk pick it up on the weekends.

        • YouDidWhatNow? says:

          If the stuff you buy is only 6% less expensive at Amazon than it is at a B&M store, then it’s still 6% less expensive when you factor in the fact that you have to pay the same 6% sales tax in either case. Amazon is still cheaper.

          I believe the point of Prime is free 2nd-day shipping, and some other perks. If you don’t think that’s worth paying for, that’s up to you…but it never had anything to do with tax.

          As for PA needing to “suck it” – shurely you’re aware of use taxes, and were paying those anyway then? This isn’t a new, additional tax burden on you as a resident of PA. Even though you and I both weren’t paying use taxes when we should have been…the fact is we were always supposed to be, and there’s no point in pretending we weren’t.

          • The Beer Baron says:

            A-HA! You, sir, have misspelled “surely,” an egregious error which completely invalidates your argument! I will be sure (note spelling) to gloss over everything you have to say from now on, as someone as careless as this with simple spelling clearly cannot be trusted to make a cogent or compelling argument!

            I certainly acquitted myself well in that exchange, eh wot?

            • YouDidWhatNow? says:

              [not sure if you know I did that on purpose, lifting the spelling from a UK-based website, or actually being serious]

              /fry squint

      • sweaterhogans says:

        Also, what happens if the fulfillment center of my selected product is NOT in PA? Should I still get taxed? I think they’re just using these centers as an excuse.

        • RedOryx says:

          Who’s using the centers as an excuse?

        • YouDidWhatNow? says:

          That never has mattered…what has mattered is having a business presence in that state.

          Say you buy something from BestBuy.com – and there are Best Buys all over your state. The fact that the thing you ordered actually, physically, came from a BBY facility in a different state makes no difference…sales tax is still collected by BestBuy.com and remitted to your state.

  10. ericadam says:

    At first I was a little peeved when I read the headline. Then the last sentence says that Amazon has 6 fulfillment centers in PA. So that actually makes sense. I’m not upset about it.

  11. jessjj347 says:

    Honest question:

    What is one supposed to do if s/he lives in one state and has something shipped from Amazon to another state that collects sales tax? E.g. someone lives in OH, but ships an Amazon purchase to a workplace in PA and gets hit with PA’s sale’s tax.

    Technically the person is still a resident of OH and is using the product there, so how does that get rectified? Can the person get a refund from PA and pay it to OH? something else? etc?

    • YouDidWhatNow? says:

      Your honest question poses an honest dilemma.

      From the legal standpoint, as I understand it, the transaction happened in PA. Therefore, PA sales tax (or use tax) is due.

      I would suppose the directive you’d get would be to have stuff shipped to your home state…as inconvenient as that may be.

    • axhandler1 says:

      I don’t know for sure, and it probably varies state to state, but I imagine most states would have some sort of tax credit for sales/use tax paid to other states so that you do not end up being double taxed. For instance, if you work in NY, but live in NJ, you pay NY taxes on your income, and then also owe NJ tax because you are a resident. However, NJ gives you a credit for taxes paid to other jurisdictions (NY) and you can apply that credit against the tax you owe in NJ, thereby eliminating the double-taxation. Like I said, I don’t know and I’m too lazy to research it, but I wouldn’t be surprised if most states have some kind of tax credit for sales and use tax in addition to income tax.

      • YouDidWhatNow? says:

        Tax reciprocity.

        I’ve encountered it when registering a vehicle I bought in another state.

        For example, I buy a motorcycle in Statesota. I paid 5% tax there on that motorcycle, in accordance with their tax laws.

        But I live in Happiness state…and the applicable tax here is actually 7%. So when I go to register my new motorcycle, I have to pay 2% tax to Happiness because of the reciprocity with Statesota.

        I am not honestly sure what happens in Statesota had a larger tax rate than Happiness. I rather doubt that Happiness would have given me a rebate on the taxes I’d paid in Statesota…

  12. R-Suarez- says:

    “We believe that customers (in Pennsylvania) will continue to come to Amazon because we offer the best prices with or without sales tax,”

    Unfortunately this is not the reality in may cases, Amazon has become a price matcher instead of a price leader… I learned this the hard way when they started charging taxes in TX last month. I have found myself buying at other stores things that I normally bought from Amazon, prices are basically the same in the items I used to buy from them (electronics, movies, books, music)

  13. HomerSimpson says:

    Good to know Tom Corporate will now have extra money to give to his gas driller buddies along with funding for voter ID laws, election disenfranchisement, and to start a little savings account for Jerry Sandusky if there’s anything left over.

  14. thewatchdog says:

    There is a little-known fact that everyone is missing called the vendor discount. In Pennsylvania the kickback for collecting sales tax on behalf of the state is a discount of 1%. So if a store sells a $100 item and charges the extra $6 to the customer [6% sales tax], they send $5 to the state and keep the other $1 for “administrative costs”. So a big chain like walmart who makes $100 million a month gets to keep an extra $1 million just for following the law. I am sure Amazon will be no different, and that might make up for any customers that stop buying in PA.

  15. cakepanman says:

    Actually people ordering from Amazon will be paying more in sales tax then the non-online store.
    When you order something you total all your items add the shipping then add the sales tax.PA is one of many that do it this way.The way most places do it,they have free shipping,but you are still paying it one way or the other.

  16. npo says:

    Are you guys that annoyed about paying 6% tax?

    I’m a Brit and we pay 20% sales tax, and I don’t care at all.

    In my view at least, tax increases are a good way to invest in services and hopefully improve the government’s finances, or at least pay down the deficit…

  17. J-Mac says:

    I was somewhat pissed off when I made my first purchase on 8/31 and saw sales tax added on. I do realize that the sales tax has always been due but internet sales have always been excluded unless they operated a retail establishment within the state. That’s primarily because the internet didn’t exist when the sales tax was made law in PA, and since all other stores that are required to report and collect sales tax are within the state that same rule is about all PA could apply to web vendors. However I understand that they just amended the law to require internet sales to be reported and collected. This fact was not generally reported where most normal peeps get their news so it still hit me as a surprise.

    I’m not upset that Amazon will now collect the tax; I am upset that Amazon decided not to mention it to their customers. Their reply when asked about that in interviews? That they would only inform customers who asked specifically about it. All others would simply be expected to realize it as they shop. IMO that’s a lousy attitude. It’s not like everyone wouldn’t realize the tax was being charged, though I’ll wager that some automatic purchases – like the Subscribe and Save items – were taxed without the buyers even realizing they had been charged sales tax.

    Sorry but Amazon’s own little “Don’t ask, don’t tell” policy wrt the sales tax just stinks.

    Jim

    • J-Mac says:

      And BTW, for those accusing folks here of not having reported their Amazon purchases to PA in the past, I actually inquired about that back in 1999 after making my first few purchases at Amazon online. An accountant friend nicely threw a little fear at me by saying that the web purchases weren’t quite like a short side trip to Delaware, where no one would ever be able to prove cash purchases there were made. The web sales left a “paper” (electronically) that the state could follow. So I called the state to ask how I would go about paying the sales tax for online purchases. After about three weeks of being bounced around the state offices to numerous people who had no clue how to do this, I gave up. I was told to NOT pay it with my state income tax as there was no way to determine what the additional payment was for.

      So you really couldn’t pay sales tax on internet purchases, at least back then. I guess at some point they found a way but they sure didn’t let anyone know about it until this past December when they added that one line item about it on the state income tax return forms. Of course since this was not announced till December, most folks had not kept records of what was purchased that was taxable and what wasn’t taxable. (For those who don’t live in PA, the chart of what is and is not taxable is long and extremely confusing!)

      Jim