In recent weeks we’ve heard about battles Amazon is fighting in states like Hawaii, Colorado, Massachusetts, Arizona, California and Texas. Now, this week, we hear the fight is being brought to Tennessee and Nevada.
According to tax lawyers following the internet sales tax movement across the country, Amazon is under attack again. This time from a group of hotel-casinos and small businesses in Nevada hoping to persuade their State’s legislature to pass new laws requiring internet merchants to begin charging and collecting sales tax from internet sales to Nevadan residents. Tax attorneys point-out the initiative in Nevada is different than in other states trying to impose some type of internet sales tax, because internet sales are already supposedly taxed.
Under existing Nevada law, tax attorneys note internet merchants are not required to charge, collect or report sales tax to the state. Instead, Nevada residents are expected to fill-out a form reporting the sale to the State’s Taxation Department and paying any applicable state sales tax owing.
Arguing it is not a new tax but merely a change in the way sales taxes is collected, proponents in Nevada argue the change could result in an additional $16 million dollars in revenue each year. Tax lawyers point out however, the proponents’ argument implicitly concedes the real problem with Nevada’s current internet sales tax scheme is a lack of compliance by consumers which advocates are now trying to fix by putting the burden on e-commerce merchants rather than consumers.
And in Tennessee, tax attorneys report that local Nashville retailers are claiming it is unfair to allow Amazon and other e-commerce companies to make internet sales to Tennessee residents without charging and collecting state sales tax. Tax lawyers observe this is a common argument used by many land-based brick and mortar businesses trying to level the playing field against internet merchants.
Significantly, during an awkward Tennessee Senate Finance Committee hearing, an Amazon representative was grilled repeatedly about a confidential sale-tax exemption agreement which Tennessee State officials had struck with Amazon to entice the mega-retailer to build two distribution centers in the state.
If you are an internet merchant attempting to wade through a quagmire of complex and politically driven state sales tax initiatives; or if you owe back taxes for sales tax you should have already collected and paid to a state or states; or even if you have unfiled returns and have not yet reported sales revenues to state regulators, don’t despair. Tax lawyers are available to assist you in dealing with this burgeoning battleground for the next round of new tax initiatives.
Segal, Cohen & Landis 9100 Wilshire Blvd. Ste. 601E Beverly Hills, CA 90212 (310) 285-3999