One of the most well-known online stores in the country, Amazon provides a variety of goods to customers all over the place. However, a lot of buyers are uncertain about whether they must pay sales tax while making purchases on the website. So which states do Amazon’s sales taxes apply to?
This question does not have an easy solution. The particular states in which tax is charged can vary, however Amazon does charge sales tax on transactions made in many states. Amazon will start collecting sales tax in the District of Columbia and 45 other states in 2021. Only Alaska, Delaware, Montana, New Hampshire, and Oregon now do not impose a sales tax.
Customers who reside in states where Amazon does collect sales tax can anticipate the tax being added to their orders at the point of purchase. Depending on the state, the exact tax rate imposed can change, but it often ranges between 4% and 10%.
In several areas, Amazon also levies tax on its Prime membership program in addition to sales tax. This is so because subscribers of Prime can access streaming music and movie services in addition to receiving free shipping. Customers may notice a tax charge on their Prime membership fees because many states impose taxes on these extra advantages.
Regarding the linked inquiries, Amazon must submit income tax returns to the IRS just like any other company. This implies that the government will receive annual financial reports and tax returns from the business. The 8.25% sales tax rate cited in the question, meanwhile, relates to the Texas tax rate. The cost of the item must be multiplied by 0.07 and then added to the original price to account for the 7% sales tax. In conclusion, with the exception of a few tax-free jurisdictions, Amazon levies sales tax on purchases made in the majority of states. Customers need to be aware of their state’s tax rate and prepare for it to be added to their orders at the checkout. Additionally, in some states, Prime membership costs may be taxed.
If the buyer was charged the erroneous amount or the item was returned, for example, Amazon may give a sales tax refund. For purchases that were correctly taxed and were not returned, however, Amazon often does not refund sales tax.