One of the largest online merchants in the world, Amazon has gained popularity as a destination for millions of customers. However, a common observation among Amazon customers is that the taxes on the site might occasionally be incredibly exorbitant. Why is that so, then?
The fact that Amazon is compelled to collect sales tax in some states is one of the key causes of the high taxes on the corporation. Every state in the US has its own tax regulations, and some of them demand that online sellers collect sales tax from customers who make transactions within their boundaries. As a result, you will be responsible for paying the applicable sales tax on your purchases if you reside in a state where Amazon is obligated to collect it.
You must ensure that your shipping address is in a state where Amazon is required to collect sales tax in order to add 7% sales tax to your Amazon transaction. When you check out after doing this, the tax will be immediately added to your transaction.
Despite the fact that Amazon always collects sales tax for items it sells directly, it does not always do so for third-party merchants that utilize its platform. In some states, however, Amazon is obligated to collect taxes on behalf of these merchants due to legislation that have been passed. This is referred to as the marketplace facilitator tax, and it indicates that you might still be required to pay sales tax even if you purchase a product from a third-party seller on Amazon.
There are a few options available to you if you want to save money on taxes when shopping on Amazon. One choice is to shop for things like digital downloads or non-tangible objects that are exempt from sales tax. Shopping on Amazon’s overseas websites provides an additional choice if you want to find items that are either tax-free or have reduced taxes.
As a result of state regulations requiring the collection of sales tax, including taxes on third-party purchases, Amazon’s taxes may be substantial. Although there are ways to dodge these taxes, it’s vital to remember that doing so might have penalties and legal repercussions. It is therefore advised that you pay the taxes due on your Amazon purchases in accordance with the legislation.