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Beginning on Nov. 1, many consumers across the U.S. will pay sales tax on purchases made from Amazon.com, representing a significant change from the company’s previous policies, which hedged on avoiding collection of the tax.
In Massachusetts, Connecticut and Wisconsin, state lawmakers enacted tax laws that break away from Amazon.com’s previous non-tax collection policies. An estimated 163 million Americans from 16 states will be impacted as a result, the Wall Street Journal reported.
On Oct. 18, the Illinois Supreme Court ruled against a state law that attempted to collect sales taxes from purchases made online. However, New York’s high court ruled, in early 2013, in favor of the collection of sales taxes from online sales, Reuters reported.
Both rulings represent a divergence on a state level regarding tax laws, suggesting that this issue may come before the Supreme Court in the imminent future.
“There will continue to be additional litigation at the state level exacerbating the problem,” Stephen Kranz, a partner at law firm McDermott Will & Emery, told the news source. “That is clear and should be a factor considered by the court in deciding whether to take the New York or Illinois case.”
Amazon’s tax-free status has been interpreted by some experts as crucial for giving the online retailer an advantage over brick-and-mortar retailers, the Wall Street Journal reported.
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