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.