Pennsylvania to tax Amazon customers

Starting Sept. 1, Amazon customers will have to dig deeper into their pockets.

The Pennsylvania state government will start collecting sales taxes from online retailers that have physical sites in the state, including Amazon.

In a decision last December, the tax collection was initially scheduled to begin Feb. 1, but was recently postponed to the fall. This is due to requests from online retailers for more time to modify their software and systems to adjust to the change.

A 1992 U.S. Supreme Court decision ruled that internet retailers cannot be forced to pay sales tax, unless they have a physical presence such as stores, offices or warehouses. Amazon has not paid this tax since the Supreme Court ruling, but will be forced to do so beginning this fall.

The online retailer owns a large distribution site and multiple warehouses in Pennsylvania. Amazon representatives did not respond to multiple requests for an interview.

Pennsylvania state government claimed it would have earned $345 million in tax revenue last year if Amazon and other online retailers had to pay the tax, according to The Journal of Commerce.

Michael Row, the owner of the Penn Book Center on 34th Street, is glad about the change. “It’s unbelievable that Amazon had such a free ride for so long and nobody seemed to care. I think that’ll be a big help to bookstores since we can’t compete with Amazon’s prices,” he said. “It’s a very tough business. This will help put us on a level playing field.”

However, Engineering senior Chinmay Paranjape, a loyal customer of Amazon, is upset with the new regulations.

“As a consumer, this is very annoying because one of my favorite things about Amazon is that what you see is what you pay — unlike other stuff, such as Southwest tickets,” he said.

Paranjape said the new tax will not keep him from shopping at the online retailer since “the tax rate is less than the amount I save by shopping on Amazon.”

“Having a tax included might make me think twice about subscribing to Amazon Prime,” College freshman Daniel Wendler said. “If eBay has it, I’ll do that instead, but this sales tax won’t stop me from shopping at Amazon since it’s still convenient and cheaper than the Penn Bookstore.”

Engineering freshman Michael Pintauro will continue to be an Amazon customer.

“Amazon’s pretty cheap, so the tax doesn’t really affect me much. I don’t mind paying an extra $2 for a $20 purchase if it’s going to help out the governor or something,” he said.

Pintauro estimates he spends between $200 and $300 a year on Amazon. “There’s a very small chance of not finding what you’re looking for.”

Pennsylvania is not the only state where customers will now have to pay a tax. Last Friday, the Virginia Senate voted to close what’s known as the “Amazon loophole,” which requires online retailers with a physical presence in Virginia to collect sales tax from customers.

Comments (6)

It think it is wrong that a state is so miss managed that they need to go after money in this fashion.It just makes it harder for the small businesses doing business on the internet to function-running up their costs to track this=running them out of the state. If they would focus on what is important-helping more businesses to come into the state they would have the “tax” based needed to run the state. And not go after petty tax dollars. Pa the land of taxes.

I’m sorry, but I am a small business in a brick and mortar storefront and I have to charge tax, why shouldn’t an on line company?
I’m happy to say that we are about the 10th state to take a stand. In most cases the government in the state realizes that whether it is on line or in your store, everyone should be charging tax. It is so important to the communities, to their schools and their economy in general

I have always paid the sales tax due to my state without charging the customer as a normal cost of doing business. It’s requiring the retailer to charge the tax instead of enforcing use tax laws which is at issue. Most customers refuse to pay the tax, and charging it is a deal killer. If customers won’t pay their fair share then they are the scofflaws, not us online retailers. My state already has a law in place which does this, and yet people try to find ways to get around it. I get that a big corp like Amazon needs to get its act together but it won’t because right now its customer service is in India. Think about that while you chew on the problem. Forbes reports that Amazon has been downgraded on the stock market, and it refuses to answer questions. One day that will come back to bite it bigtime.

I’m sure that the folks responsible for the PLCB will know how to spend my money better than I do. heavy dose of sarcasm Good thing I’m graduating!

As an online retailer I don’t charge the tax but I pay it to my state every year as a cost of doing business because if customers see that there is a tax they run away. I can’t afford to lose customers, and sales tax is a deal killer. Amazon thinks it is above the law, but it is growing more and more incompetent at doing its own business every day. I don’t care if it survives or not. It has robbed business from me, so if it gets indicted I won’t be shedding any tears over it.

As an online retailer I pay the tax to my state as a cost of doing business without charging my customers. Charging tax online is a deal killer. If customers see they have to pay any kind of tax they run away. I can’t do business the same way I do in person, you see, as I charge tax when I am selling in a physical environment. My state has already passed a similar law, which Amazon already ignores. I’m not responsible for what Amazon does.

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