Beginning Nov. 1, Wisconsin became the 14th U.S. state in which online retailer Amazon collects state sales taxes.
The giant online retailer plans to open a 1.5 million-square-foot distribution center in Kenosha. Amazon collects state sales tax in states where it has a physical plant presence.
In states where Amazon has no physical presence, the company does not generally collect the tax, giving it a pricing edge over bricks-and-mortar merchants.
The new 5-percent “Amazon tax” will add about $30 million per year to state revenue, according to Wisconsin Department of Revenue spokeswoman Laurel Patrick.
The state collected a total of $4.4 billion in sales taxes in fiscal 2013. The money from Amazon would go into the state’s general purpose revenue stream, she said.
The Kenosha facility will bring an estimated 1,100 jobs, most with starting salaries of $11.25 an hour, plus benefits. About 850 of the jobs will be warehouse jobs, with the balance for technicians, computer technicians and management.
The Kenosha City Council approved $18.2 million in tax incremental financing, including a $17 million development grant to Amazon. The city would be repaid by capturing property tax revenue from the project.
There is no national sales tax in the United States, and currently no legislation pending that would allow states to enforce sales tax on online retailers.
A 1992 Supreme Court decision ruled that retailers without a “physical presence in a state” are not required to collect and pay the state such taxes. The law leaves the tax payment to consumers – who are supposed to pay on their own.
The other states that Amazon collects sales tax in are: Arizona, California, Georgia, Kansas, Kentucky, New Jersey, New York, North Dakota, Pennsylvania, Texas, Virginia, Washington and West Virginia.
