Tax News

No more tax holiday for Amazon-users

Tax-free shopping at Amazon is over in all states that have a sales tax. Beginning April 1, Amazon started collecting sales taxes on purchases nationwide from all 45 states that have a statewide sales tax.

The five states that do not collect sales taxes are:

  • Alaska
  • Delaware
  • Oregon
  • Montana
  • New Hampshire

Typically, an online retailer only has to collect sales tax in states where they have a "physical presence" or nexus in a state. With increasing transition to online purchases versus main street vendors, online vendors failure to collect sales tax have cost states over $17.2 billion in lost sales taxes last year alone, according to the National Conference of State Legislatures. This lack of collection has caused states’ sales tax revenue to fall behind.

States are hoping to catch up, which is why we see an evolution towards economic nexus and bright line thresholds, and Amazon volunteering to start collecting in all states will help.


Consumers should increasingly expect sales taxes on their receipts when shopping online. While Amazon is collecting sales taxes on Amazon-direct purchases, consumers can still shop tax-free when they buy from one of the more than 100,000 third-party vendors who sell through Amazon. States may take aim at these third-party vendor sales now that Amazon is complying.

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