Tuesday, January 21, 2014

A Sad Day For North Carolinians - Amazon To Collect NC Sales Tax

It is a sad day for North Carolina consumers who patronize Amazon.com. On Monday, Amazon.com announced that they will be collecting sales tax for purchases in North Carolina effective February 1st.
Amazon.com will begin collecting sales tax in North Carolina beginning Feb. 1, a company official confirmed Monday.

The move will make North Carolina the 20th state in which the online retailer collects sales tax, according to Amazon’s website. It’s unclear why Amazon decided to make the change now. A spokesman didn’t respond to questions about the timing of the move and whether the Seattle-based company would begin collecting sales tax in other states besides North Carolina on Feb. 1.
The North Carolina Department of Revenue was slapped down in 2010 when they tried to force Amazon.com to give them the names of customers residing in North Carolina. This demand was found to violate the First Amendment.

The General Assembly passed a law in 2009 that said if a company had an affiliate program it has "nexus" in the state. When a company has nexus or a physical connection to a state, it can be forced to collect sales tax for that state according to the Supreme Court in Quill v. North Dakota. In response, Amazon.com closed their Amazon Associates program for North Carolinians and it remains closed to this day.

I did speak with a customer service representative with the Amazon Affiliates Program this morning. She said she didn't know when the Affiliates Program would be reopened to North Carolinians. I probably will apply when it does reopen.

To summarize, we in North Carolina are now going to have to pay sales tax on our Amazon purchases but we might get the opportunity to be Amazon Affiliates again. Frankly, I'd trade the Affiliates Program for not having to pay sales tax anyday.


  1. We've been paying sales tax through Amazon in Texas for a year and a half now. While I never "enjoy" paying taxes of any sort, its pain has ebbed to more of a dull throb at this point. And many times, we still don't have to pay sales tax because of the peculiarities of Amazon's relationship with a given vendor (such as those merely fulfilled by Amazon).

  2. Nevada went over to the dark side on Jan 1. For me, it will entail a drastic reduction in my Amazon purchases. Even people without my ideological convictions will have 7% less to spend.

  3. You say she didn't know when the Affiliates program would be reopened. Did she say it would be reopened at some point?

    1. @Anon: She had no info one way or another. However, the reason that Amazon closed it to North Carolinians in the first place is because they didn't want to collect NC sales tax. With the change, I don't see how they could or want to keep it closed to those of us in NC.

    2. Thanks John. I agree with your logic. Amazon doesn't exclude Associates in any of the states where they collect sales tax so I'm hoping they open the program back up as of Feb. 1.

  4. As much as I am a small-government guy, someone has to pay taxes. The revenue comes from somewhere. Income and sales taxes account for the bulk. One is a "flat" tax, and the other is generally a "progressive" tax. I favor the former and would gladly pay a higher sales tax in exchange for a lower income tax.

    The unfortunate thing in your circumstance (like the rest of us) isn't that you now have to pay a sales tax - it's that the state won't reduce the income tax or expenditures by the amount of "new" revenue they will be getting from you and your neighbors. Nope. It'll just grow the beast a little more, ad nauseum. Adding new "revenue sources" (they won't say the word "tax" unless forced) is the way to get more from you, without reducing their take. I got three states chasing me right now for perceived slights going back more than 11 years. Little things like papers they say I didn't file (but did) that will cost me $500 in fines. Note that not one claims I didn't pay the full share of the taxes. They just claim I did it wrong. Or something.

    I hate California.

  5. The main reason Amazon is doing these deals is in prep for moving a distro center into the state; expect quicker delivery times as Amazon ramps up to compete with B&M locations by having 1-day delivery on Prime

  6. This is what happened in NJ already

  7. Add to all this the fact Bezos bought the Washington Post. It's a pretty solid "stick", to borrow from old Teddy's line.

    Politicians who go after Amazon and restrict their fortunes now have to wonder what the WashPo will do to them. The threat never need be spoken. Also the carrot is there: be nice and I'll be nice in return.

    FWIW, Bezos is no longer opposed to internet taxes. He just wants them to be payed going forward, not litigated for previous nexus (see: Texas).

  8. Why would anyone who is pro 2nd Amendment support anti 2nd amendment companies? I don't use Amazon, Ebay, Cosco and many others for that reason.

  9. It's a three hour round trip to get to any reasonable facsimile of a store that has what we need other than basic groceries. We're rural and Amazon Prime gets us our junk in about a day. With two little kids, work schedules and a busy life you turn to the things that help the family. Our UPS driver might as well be the guy bagging groceries, as much as he hands us products we buy. I got family and livestock to feed daily. Time counts.

    I got a Walmart within 20 minutes north and south. They are small and frankly I don't like what they sell.

    I strive to support 2A friendly firms, but I cannot build my entire life around the nuances of corporate decision-making that may or may not comport with my personal philosophies. I know Amazon does not sell guns and ammo, but frankly in their shoes I wouldn't go near them with a ten foot pole. Amazon wins on efficiencies, and firearms require absolute conformance with literally thousands of regulations (state, federal, local) that differ for every sale. Dealing with the government is the absolute antithesis of "efficient". I get my guns from gun shops, and other stuff from places like Amazon. I don't need them to do it all nor do I care if they think guns are icky.

    If Bezos comes out and says he thinks my civil rights are a joke and is working to derail them (or even short of that), I will change my purchasing habits. But he can do his thing and I can do mine. No need for us to see eye to eye on everything.

  10. "I did speak with a customer service representative with the Amazon Affiliates Program this morning. She said she didn't know when the Affiliates Program would be reopened to North Carolinians. I probably will apply when it does reopen."

    Amazon re-opened the associate program to North Carolina residents on February 27th. If you were in before you've probably already gotten an email about it. If not, you can apply right now. Unfortunately you'll have to go back and replace your old affiliate code in old links.

    "To summarize, we in North Carolina are now going to have to pay sales tax on our Amazon purchases but we might get the opportunity to be Amazon Affiliates again"

    I don't mean to be antagonistic, but consumers were (and still are) legally responsible for paying sales tax to the state for purchases they make with online retailers that didn't do it for them. This shifts the burden back to the company, but it's not a new obligation really. All of us (and I'm sure it's really all of us) that weren't paying a state sales tax because Amazon didn't charge one were shirking our responsibility and harming the state budget because of it

    Yeah, nobody likes paying taxes, but taxes are why my nephews are getting an education, why our road got repaved last year (and the Danbury public library parking lot which badly needed it), and the foot plus of snow plowed off our road last month. We may not like the sales tax but we do like most of the things it pays for.

    At least we're all back in the associate program. With the way the economy is in this state I could use all the extra income I can get.