Amazon to begin collection sales tax in Wyoming

Beginning March 1, local businesses will be on an equal footing with Amazon because the state has come to a voluntary agreement with the online retailer to collect sales tax on sales to Wyoming businesses and consumers. Meanwhile, the Joint Interim Revenue Committee has sponsored a bill that would require remote sellers to collect sales tax.

Beginning in March, online retailer Amazon will begin collecting sales tax on purchases shipped to Wyoming businesses and consumers.

Last week, Gov. Matt Mead announced that the agreement between Amazon and the state is voluntary, and the company has recently moved to collect taxes in Utah, Iowa, Nebraska and South Dakota. The company collects sales tax on purchases made in 34 states and the District of Columbia, the release said.

“It’s about time,” said Luke Todd of the Sports Lure. “I feel very strongly that this is the right thing. I wish we could do that for all online sales. It would even the playing field a lot for us.”

Todd echoed the sentiments of many small business owners and lawmakers who spoke at the September meeting of the Joint Revenue Interim Committee. Their concern is that remote retailers receive an unfair advantage because their customers don’t have to pay sales tax.  

“Wyoming businesses are at a disadvantage when internet businesses fail to collect tax,” Mead said in a statement. “This is an important step in the right direction. I encourage the Legislature to continue to work on the remote seller’s bill.”

It is unknown how much revenue will be generated by sales tax collected by Amazon. The National Conference of State Legislatures estimates that in 2014 Wyoming lost out on $61.7 million in sales tax revenues to catalog and online sellers that cannot collect sales taxes on purchases by Wyoming residents and businesses.

Governed by the 1992 U.S. Supreme Court decision in Quill Corp. v. North Dakota, online retailers are allowed to collect sales and use taxes only in states where they have an in-state, physical presence. But as online spending has continued to grow – online sales amounted to about 9 percent of all retail activity in the second quarter of 2016 – the list of Quill detractors has grown.

Ever since it was decided, states and municipalities have complained that Quill amounts to a tax break that allows out-of-state businesses to take advantage of the local customer market without contributing to the state’s sales tax base.

“Basically, all of our services depend on sales tax, and they are getting short changed.” Todd said. “We all use the streets, the library, the fire service; all of it depends on sales tax. Nobody likes to pay taxes, but our state desperately needs these sales tax dollars.”

Over the past year, several states, including Wyoming, have launched efforts to challenge Quill. House Bill 19 would require sellers who earn a gross revenue of more than $100,000 from the sale of goods to Wyoming residents or complete more than 200 transactions in Wyoming to collect sales tax

Members of the Joint Revenue Interim Committee unanimously recommend the bill and on Monday the bill passed its second reading in the House on Monday.

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