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Amazon tax now out in Illinois, coming Nov. 1 to Wisconsin

October 21, 2013

The holiday season is approaching. Yes, those were Christmas items Hampton Roads shoppers spotted in local stores last month. And with Halloween on the way, other retailers nationwide are starting their annual shopping sales pushes.

Many folks, however, including me, do our gift shopping, especially for the holidays, online. There are no crowds, you can shop at 3 a.m. and, for some buyers, the purchases are still sales-tax free.


Online-shopping-woman-bags-gifts

But that's changing in more and more states.

And next month, Amazon shoppers in Wisconsin will see sales taxes added to their purchases from the Seattle-based online company.

New Amazon tax for several states: Beginning in November, Amazon reportedly will start collecting sales taxes on goods sold to Wisconsin residents.

The new 5-percent Amazon tax is projected to add about $30 million a year to
state revenue. Wisconsin collected a total of $4.4 billion
in sales taxes in fiscal 2013.

The Wisconsin Department of Revenue hasn't issued (or posted to its
website) an official statement on the new tax collection. Nor has Amazon
commented on the coming collections.

But Wisconsin Department of Revenue spokeswoman Laurel Patrick has told several media outlets that the online retailer will register with the state and obtain a Wisconsin sellers'
permit by Nov. 1.

And Amazon is set to open a warehouse in Kenosha, Wisc., which will give it a physical presence, or nexus, necessary per the 1992 U.S. Supreme Court Quill v. North Dakota decision to collect taxes from all purchases.

Nov. 1 also is the day Amazon will begin sales tax collection from Connecticut and Massachusetts shoppers.

That means next month there will be 16 states where Amazon collects sales taxes. The others are Arizona, California, Georgia, Kansas, Kentucky, New Jersey, New York, North Dakota, Pennsylvania, Texas, Virginia, Washington and West Virginia.


Online tax out in Illinois: As Wisconsinites were learning of coming online sales taxes, the Illinois Supreme Court struck down that state's law that required online retailers, like Amazon, to collect sales tax if they have in-state Web affiliates.

When the law was enacted two years ago, Internet marketers fled Illinois.

The Illinois high court said the law violated federal rules, which prohibit putting
a discriminatory tax on digital sales. It's the first time a high court
has thrown out such a law; 18 other states have similar statutes.

In March, New York's high court upheld that state's similar law, which then prompted Amazon and Overstock.com to petition the Supreme Court.

The United States' nine justices haven't decided whether to consider the New York case. The new and opposite ruling from Illinois' top legal panel could prompt the Supreme Court to make the ultimate decision on taxes on remote sales. 

Federal law pending, too: Amazon, brick-and-mortar shops and customers also are waiting on Congress.

The giant
retailer for which these types of taxes are named supports
the federal the Marketplace Fairness Act which would require tax collection by all online sellers.

The bill has passed the Senate. The House Judiciary Committee chairman has issued some basic principles on remote sales tax that he would like to see in the bill, but the measure has stalled in that chamber.

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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