On­line sales taxes ex­pected to en­rich R.I.

State to reap nearly $35 mil­lion


PROV­I­DENCE — Many on­line shop­pers in the United States have for years had to pay state sales taxes when­ever they buy goods from Ama­zon. But the Seat­tle ecom­merce gi­ant has dragged its feet on col­lect­ing sales taxes in small and sparsely pop­u­lated states where it doesn't have any dis­tri­bu­tion cen­ters or cor­po­rate of­fices.

That's quickly chang­ing this year. And gov­er­nors and state leg­is­la­tors look­ing to bal­ance their be­lea­guered bud­gets are re­joic­ing as they brace for a boost of rev­enue from Ama­zon sales.

Ama­zon cus­tomers in at least 10 states will be­gin pay­ing sales taxes on their web­site pur­chases for the first time this win­ter. Tax col­lec­tion be­gins Wed­nes­day in Mis­sis­sippi, Mis­souri, Rhode Is­land, South Dakota and Ver­mont. It al­ready started this month in Louisiana, Iowa, Ne­braska and Utah, and be­gins in Wy­oming on March 1.

The com­pany didn't re­turn re­quest for com­ment and hasn't ex­plained its rapid shift, but the move fol­lows last month's U.S. Supreme Court rul­ing that re­jected a chal­lenge to a Colorado law re­quir­ing on­line sell­ers to no­tify cus­tomers about how much they owe in taxes. Colorado of­fi­cials had es­ti­mated they were miss­ing out on as much as $172.7 mil­lion a year.

To avoid col­lect­ing taxes, Ama­zon has his­tor­i­cally re­lied on an­other high court rul­ing that pre­dates the era of on­line shop­ping. That 1992 de­ci­sion bans states from forcing out-of-state re­tail­ers to col­lect taxes if they don't have a phys­i­cal pres­ence in the state.

Rhode Is­land, which has long fought for Ama­zon to re­mit sales taxes, is now count­ing on nearly $35 mil­lion in tax rev­enue next year from the com­pany and other on­line re­tail­ers that fol­low its lead.

"Ama­zon's do­ing the right thing," said Robert Hull, di­rec­tor of the state's rev­enue de­part­ment. "They're an $85 bil­lion rev­enue an­i­mal that's mak­ing sales, his­tor­i­cally, into Rhode Is­land and not pay­ing the 7 per­cent sales tax."

Cus­tomers might not be as pleased as state bud­get-writ­ers.

Those in Rhode Is­land and other states were tech­ni­cally sup­posed to de­clare the taxes owed on items bought on­line at the end of the year, but al­most no one did. A pro­posed Rhode Is­land law would mimic Colorado's in or­der­ing com­pa­nies that don't col­lect sales taxes to post a "con­spic­u­ous" on­line pop-up no­tice in­form­ing cus­tomers about what they owe and fol­low­ing that up with an email and an an­nual tax obli­ga­tion mail­ing. The mea­sure is a way to ef­fec­tively co­erce com­pa­nies to col­lect the tax if they don't want to bur­den their cus­tomers with un­pleas­ant no­tices.

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