We love Amazon Prime. Someone in our office gets something from Amazon every day, and Prime free shipping is a really strong incentive to just get it from Amazon and forget about shopping around for the best price.
I noticed, beginning at the start of this month, that my Amazon purchases were now being charged sales tax, even though they have no physical presence in North Carolina. We have been pushing back hard against attempts in Congress to force merchants to charge sales tax on purchases from out of state customers and I, for one, was glad that the sales tax bill passed by the Senate has apparently died in the House.
When Amazon charges me tax on a purchase, they take on the responsibility of reporting that tax to North Carolina and forwarding my tax payment on to the state. It seems like a huge administrative headache and an effort for which Amazon gains nothing.
It suddenly dawned on me that perhaps the reason that Amazon has started charging me (and everybody else) sales tax is because handling the administrative side of collecting and distributing tax payments is a huge business opportunity.
The idea that a small business operating on the internet (that’s us!) would have to track and pay taxes to every taxing authority that charges sales tax would be a nightmare. Not only does every state charge sales tax, there are lots of local municipalities that tag on their own taxes. When the tax is collected, it must be at the appropriate rate for that specific location.
A behemoth like Amazon has the capacity to handle this process, for a price, and make sure that everyone gets what was charged to customers under their authority. It could be a huge moneymaking opportunity for Amazon and they wouldn’t have to offer free shipping.
Maybe they’ll deliver the tax payments by drone.
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