New Law Will Try (And Probably Fail) To Make Amazon Collect Sales Tax In Georgia

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Starting tomorrow, Georgia will begin enforcing a new law intended to compel Amazon and other e-tailers to collect sales tax on purchase in that state. But it looks like Amazon may have a pretty easy work-around.

As of right now, only businesses with physical locations in Georgia are required to collect sales tax on online purchases. But starting Jan. 1, that group expands to businesses that use ads that link to their sites.

So if Amazon runs online ads and people in Georgia are clicking through to the site, then Amazon should be collecting sales tax.

But as the Atlanta Journal-Constitution points out, Amazon can (and probably will) just stop running click-through ads for computer users in Georgia.

Even the president and CEO of the Georgia Retail Association, which has been pushing for the state to figure out a way to compel online retailers to collect the tax, says he’s “not very optimistic.”

As Amazon and other e-tailers have begun eating away at the market share of bricks-and-mortar retailers, those business owners have claimed that these websites have enjoyed an unfair advantage, effectively charging less for items because they are not tacking the sales tax on top.

Meanwhile, cash-strapped governments are looking at the growing pile of money they aren’t currently collecting from Amazon and others.

Though Amazon has made deals to collect taxes in a handful of states — New York, Pennsylvania, Texas, among others — it has maintained its position that a federal law — and not dozens of state laws — regarding online sales tax is the solution.

This is the point of the story where I remind everyone that if your state has a sales tax, you are still obligated to pay it when you file your tax return, whether or not the business collects it at the time of purchase. Most people don’t, but now you can’t say you were never told.