Amazon vent

blondie42107

Amazon started charging tax on purchases last year, in my state, and I grumbled and got over it.  But now I'm grumbling again because I just noticed they are also charging me tax on my annual Prime membership.

Just venting.

bmo88

That's lame! What state do you live in? I haven't seen a change in my purchases, so I don't think Colorado changed.

als1982

Weird. Amazon has operated a distribution center in my state for well over a decade so I've always had to pay taxes on purchases, but I don't think we do for our Prime membership.

hoffse

Sorry about that, but blame your state, rather than Amazon.

Amazon has to collect sales tax if they have some physical presence in your state and your state doesn't exempt them from it. Amazon has fought the good fight (IMO) for years, and this kind of issue has gone before the Supreme Court a few times.  The rule has always been a physical presence test.  If they have a distribution center in your state, then you pay sales tax on all of it, unless your state has some other exemption in place that would let them exempt the services like prime membership.  

kmurphy2131

Yup, I hated when I started getting charged taxes too. But it's not amazons fault (other than that they built a distribution center in my state) so it had no bearing on my opinion of them.

blondie42107

I'm fine with paying tax on physical items.  I just think it's lame to be taxed on a membership.  I'm not taxed on my Sam's Club membership or H's gym membership.

hoffse

blondie42107 said:

I'm fine with paying tax on physical items.  I just think it's lame to be taxed on a membership.  I'm not taxed on my Sam's Club membership or H's gym membership.

******STUCK IN BOX**************

More and more states are charging sales tax on apps and "cloud-based products."  Prime falls in this category, since it's an online subscription service.

It's stupid, but lots of states are starting to make a distinction between online and real life.

I actually had to do a 50-state survey a few months ago on this for a client that has an online news/content service.  It's also subscription-based, and in a couple states they had to collect tax even if print media subscriptions were tax-free.  

It just varies state by state.  But I can assure you that Amazon collects as little sales tax as they can legally get away with.  They have spent hundreds of thousands (millions?) of dollars fighting it.

EDIT: Most states still have the physical presence test for app-based products, but Amazon would obviously meet that already if they are collecting sales tax on the stuff they sell in your state.  They definitely do not collect tax in all states.

Erikan73

I live in Ohio and am going through the same thing. They have opened a distribution center in Ohio so now we have to pay taxes since they have an actual location in the state. My understanding that is if the company you are ordering from has a location in your state, you have to pay taxes. And in Ohio, if you don't pay taxes on your internet order, you're suppose to claim it on when filing your state taxes so you can pay taxes on it then.

julieanne912

bmo88 said:

That's lame! What state do you live in? I haven't seen a change in my purchases, so I don't think Colorado changed.

Colorado did change as of Feb 1... we pay tax now. It's not much though, like 2%.  

lbonga1

I had a 30 day trial, and I forgot to cancel it before being charged for the full year a couple days ago. I called just now to see if they could refund me (which they did), but apparently I was charged tax too. But then I ordered some board shorts for FI and didn't have to pay tax on them. 

...and before you guys think I'm weird for ordering swimwear in the winter, it was 82 degrees here yesterday!!

short+sassy

blondie42107 said:

I'm fine with paying tax on physical items.  I just think it's lame to be taxed on a membership.  I'm not taxed on my Sam's Club membership or H's gym membership.

There might be a tax that is just built into the prices.  Not saying that for sure, but sometimes companies will do that as a gimmick so it is an "even:" price.  For example, I have Metro PCS for my cell phone and their slogan is, "$40. Period."  Meaning, all the taxes and little fees/surcharges are already just built into the price, so their customers only pay a flat $40/month for that plan.

Oddly enough, there is a Mexican restaurant/take-out place I like that also includes taxes in their prices.