Monday, February 2, 2015

Amazon Started Collecting Sales Tax In Illinois

If there were a Razzie award for "Worst State in The Union", not only would Illinois show up to collect it, but it would then give a passionate speech about how hard it worked to become the worst, would sell the award on eBay and would charge the buyer sales tax after doing it. This month, Amazon.com ensured compliance with the Illinois online sales tax law and has started collecting 6.25% sales tax on all items purchased through its site by Illinois residences. Brick mortar retailers in Illinois have praised the new law without realizing that they're shooting themselves in the foot in the long run for short sighted apparent gains.

I hate to sound like I'm vehemently anti-tax, because I'm not, but I do believe that the tax burden in Illinois is already too heavy. Merely looking at my property tax bill is enough to make my pocket book vomit twenty dollar bills. And while I do support Illinois' constitutional duty to properly fund our schools with tax revenue, I realize that they do so at half the funding rate of other states. Which, again, kicks the tax burden down the road so that other sources of funding can pick it up. Thus comes the online sales tax leading to that sinking feeling that we in Illinois are being taxed into oblivion.

Illinois isn't the first state to force major online retailers to collect sales tax. Twenty-three other states have similar requirements. Amazon can expect purchases to fall off about 10 percent, if Illinois residents are anything like the folks in other states. For big purchases, Amazon could see a decline as high as 25 percent from Illinois residents. The thing is, the 10 percenters and 25 percenters aren't taking that money to brick and mortar shops in their respective states. They're just going to other online retailers that don't collect the tax.

There are some instances where you can buy from Amazon and still avoid the sales tax. Purchase from an Amazon seller or purchase a product that says "fulfilled by Amazon" in the description. Those retailers don't have a taxable presence and will sell to you without collecting sales tax.

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