Amazon has agreed to begin collecting sales tax in Indiana, marking a rare win both for affiliates and U.S. states.
The company and state announced the agreement Monday, a deal that requires Amazon to collect sales tax on internet purchases on January 1, 2014 — or 90 days after any federal legislation on internet sales tax is enacted, whichever comes first.
Several U.S. states — looking for ways to regain sales tax losses as commerce shifts online — have pressured Amazon to begin collecting sales tax, citing the company’s affiliates as evidence that Amazon has a presence inside their state borders. Some have passed laws that would require Amazon to collect sales tax and, on several occasions, Amazon has responded by shutting down its affiliate program in those states. That won’t happen in Indiana.
Today’s announcement makes Indiana the fourth state to reach an agreement with Amazon on sales tax collection, but both the state and the company agree that federal legislation is needed to solve the online sales tax issue.
Indiana estimates that it will collect $20 million to $25 million per year from Amazon when the agreement takes effect.