LAS VEGAS -Â Everything you buy on Amazon.com will be getting more expensive starting in 2014. Nevadans will be required to pay sales tax on their Amazon purchases. A new agreement between Nevada and Amazon is expected to bring $16 million a year to Nevada.
Before anyone ever dreamed of the Internet, our marketplace grew through mail order catalogs. Later, buying over the phone became popular. Sooner or later, the government got its share, and the days of tax-free purchases on Amazon.com in Nevada will soon be history.
"In the government's eyes, that's definitely fair for them, because they want you to pay tax for everything," said online shopper Jay Godfrey.
Whether you're buying a book, movie, jewelry, or Amazon's best-selling product, the Kindle Fire, right now, you are supposed to pay sales tax to the State of Nevada.
It's called voluntary compliance, but most people don't self-report, and the state knows that. Monday, Nevada Governor Brian Sandoval announced an agreement with Amazon.
The company has a plan in place to voluntarily begin collecting and remitting Nevada sales taxes. Nevada Taxpayers Association President Carole Vilardo says this deal levels the playing field with the brick and mortar stores when it comes to sales tax.
"With the economy like this and with the price of gas, more and more people go on the Internet to do shopping," she said. "What we have happen is revenue going out of state. This is a collection issue. It's not a tax issue."
Nevada law allows companies to avoid collecting sales tax if a company doesn't have a presence in the Silver State. Amazon and Governor Sandoval also want Washington to create a simple and equitable framework for sales tax collection on Internet purchases.
Nevada won't see that $16 million in annual Amazon taxes for awhile. The new agreement changes January 1, 2014 unless the federal government enacts that legislation first.
Consumers may not want to pay more, but according to the National Conference of State Legislatures, states lose $23 billion a year from untaxed online purchases.
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