Amazon Now Charges Sales Tax On Purchases In Colorado

Amazon is charging residents of Colorado with sales tax on the goods purchased from its marketplace.

Colorado has become the 27^th state where Amazon is charging sales tax on orders and paying the received tax to the government of the state. Orders placed on January 21, 2016, show an expected sales tax figure on the order’s total cost. The amount of sales tax estimated by the American e-commerce company on one Colorado order Monday equaled to 3.3%, which does not correspond to the 2.9% sale tax rate of the state or those charged in most of the counties, metropolitan area cities, special taxation districts, or every identifiable combination of taxation rates.

A representative of Amazon refused to comment on everything about the addition of sales taxes to the purchases that have to reach the state. She instead referred to a part of its webpage that elaborates upon the tax rate estimated by the retailer the order fulfillment and the final charges of customer are determined.

The charges of municipal sales taxes by online retailer could have a lot of significance for local governments and customers. The Seattle-based company is estimated as the ninth biggest retailer locally in terms of revenue and seems to be the biggest online trading company that had not previously remitted sales tax to Colorado.

A study conducted by Morningstar and Consumer Intelligence Research has revealed that a regular Amazon Prime member makes an expenditure of $1200 on goods delivered by the company.

The company does not disclose Prime membership figures, but analysts predict that almost 25% of American houses have Prime account. If the details regarding the membership penetration are true, there could be over 480,000 houses belonging to Prime and purchases of members alone could suggest $41.8 million in terms of yearly state sales revenue. This does not include the number of goods purchased from Amazon without availing Amazon Prime.

If Amazon, like Google, only charges the 2.9% tax rate of the state government on goods ordered through the Internet, tax districts and local communities could not benefit from yearly sales revenue worth millions of dollars.

Colorado Tax Foundation disclosed that communities and tax districts of Colorado, on average, make an addition of another 4.54% to local orders. This could help to raise millions of dollars more in annual sales tax revenue to local authorities from the purchases made through the company, if it is collected.

The time for organization to start paying taxes in the state is not clear but it is expected soon.