Amazon vs. Sales Tax in Nevada

Yesterday I was interviewed on the radio show “Having It All” with Jenifer Rose on 99.1 FM Talk.  We discussed a hot topic concerning Amazon and sales tax.  Amazon does not collect sales tax in Nevada for sales made to Nevada residents.  Consumers are required to remit the sales tax to the Department of Taxation on their own. However, most taxpayers aren’t even aware of this requirement and of those who are, few actually do it. The reason:  A 1992 U.S. Supreme Court ruling that prohibits a state from collecting  sales tax unless it has physical stores in the state.

The following article is a great resource for more information and more detail on this issue:  Amazon, sales tax issue collide in Nevada

In my opinion, state laws just have not kept up with technology.  Amazon supports a federal solution (i.e. a Federal sales tax). However, in my experience that would only mean one thing… addition to a state sales tax, federal income tax and a whole host of other taxes, a federal sales tax would only be an additional tax, not a replacement.  I am not a proponent of implementing  additional taxes, but I highly support equality in application of current taxes.

Because of the way the current law is structured, companies like Amazon receive an unfair advantage.   The state of Nevada could make a change to existing law which may mean 30 million dollars in additional revenue.  With Nevada’s severe budget crisis, you can imagine what 30 million dollars in additional revenue could mean for our state.  And keep in mind, this is money that is already due, but Nevada has few resources to collect it.  There is not a formal collection system in place for these use taxes.  If you believe you owe use tax, the Nevada  Department of Taxation’s website suggests you send in a letter and a check.   Instead of going after Amazon and other retailers, Nevada could implement a more formal system for use tax collection.  However, with budget cuts this is not very likely in the near future.

This will be an interesting topic in the months and years to come.  With most states looking for more revenue, this issue is not going to go away any time soon.

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