November 2, 2012

Amazon paying up in Arizona



Your far-flung MobyLives correspondent was in Tucson last Saturday (no, we haven’t been able to return to New York, yet. Thanks for asking).

At breakfast I had a chance to scan the headlines of the local papers, and was struck by the prominence given to the lead story: “Amazon to collect sales tax in Arizona.”

By Monday, of course, the biggest story in publishing was the Random House / Penguin merger. And even that was swept away by Hurricane Sandy. Ordinarily, however, Amazon and its tax evasion generates significant interest here on Moby.

Last year the Arizona state Department of Revenue demanded $53 million in unpaid sales taxes from (assessing from March 2006 to December 2010). As could have been predicted, the amount of the announced settlement was not disclosed. Arizona online consumers will begin paying a 6.6% tax on July 1st.

According to the Arizona Daily Star,

The settlement is also a victory for the Arizona Retailers Association, which has fought for years to end the advantage the online giant has over “brick and mortar” retailers, which have to impose the state’s 6.6 percent tax plus any local levies.

California governor Jerry Brown  signed a law last year requiring immediate tax collection — Amazon agreed to a settlement in Arizona, and to a similar settlement in Virginia, taking effect later in 2013, to forestall immediate collection in those states.

Under the agreements, Amazon will, of course, not pay the original assessments. Only Washington, Kansas, North Dakota, Texas, Kentucky, New York and Pennsylvania now require Amazon to remit sales tax. South Carolina, New Jersey, Tennessee, Indiana and Nevada have also  agreed to settlements. While rival retailers may celebrate, the tax remains deeply unpopular with many consumers.


Dan O'Connor is the Managing Editor of Melville House.