The taxman cometh - for Amazon.com!

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Do you order things online, to avoid paying sales tax? Those "good old days" might be coming to an end soon...

Here's a snapshot of my latest purchase from Amazon.com (a little something for the Talk Like a Pirate party I had on Sept 19):

pirate_rings

In the US, each of the 50 states handles sales taxes a little differently, especially when it comes to online purchases. In general, if an online retailer has a physical presence in your state (such as a store or warehouse), then that online retailer must charge you sales tax for your online purchases. And in my state (North Carolina), even if the online retailer does not charge you sales tax, the buyer is supposed to pay a use tax when they file taxes at the end of the year.

As consumers have been buying more online, and less in local stores (for convenience, price, etc), the states have seen a decrease in sales tax revenue. Therefore many states are pressuring online retailers to collect sales taxes for the state - especially the large online retailers like Amazon.com.

Being an Amazon Prime customer myself, I wondered how many states currently force Amazon to collect sales taxes. I did a few searches, and found a nice detailed map in a Wall Street Journal article that showed what I was looking for. But their map was somewhat 'busy' (showing 4 different categories of taxation), and took a while for me to understand. Therefore I decided to create a simplified version using SAS.

In my SAS map, I make the states where Amazon.com has to collect sales tax red (and all other states a light/subdued color). I also added a timestamp, which will become important as the states which do/don't charge tax will likely change in the future.

amazon_sales_tax

 

Do you have to pay sales taxes for your online purchases? What are other countries doing? What's your suggestion on the best/most-equitable way to handle it?

 

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About Author

Robert Allison

The Graph Guy!

Robert has worked at SAS for over a quarter century, and his specialty is customizing graphs and maps - adding those little extra touches that help them answer your questions at a glance. His educational background is in Computer Science, and he holds a BS, MS, and PhD from NC State University.

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