Tax Tip of the Week | No. 307 | Amazon Collecting Sales Tax in Wake of JobsOhio Deal

Tax Tip of the Week | June 17, 2015 | No. 307 | Amazon Collecting Ohio Sales Tax in Wake of JobsOhio DealHere is a recent article form the Ohio Society of CPAs....Well, that was fast!On Friday, May 29, Amazon announced it was building three data centers in central Ohio.On Monday, June 1, the online retail giant began collecting sales tax on Ohioans' purchases. The move, which retailer groups and others have requested for years, will bring in between $150 million and $300 million in tax revenue to the state annually, the company said.Without Amazon collecting Ohio’s 5.75% sales tax, the state had to rely on the honor system, with taxpayers reporting their untaxed Internet or mail-order purchases. In 2012, that translated to 50,000 of Ohio’s 5-million-plus taxpayers voluntarily handing over just $3 million.As part of a deal with JobsOhio announced Friday, Amazon said it will create data centers in Dublin, Hilliard and New Albany, creating more than 1,000 jobs. In exchange, the Ohio Tax Credit Authority gave Amazon about $81 million in tax exemptions over 15 years. Amazon has said it collects sales tax in states where it has made big investments, which is about half of the states. (Meaning Amazon now has a “brick-and-mortar presence in Ohio.)Ohio retailers and retail associations have spent years trying to persuade Congress to pass laws requiring online retailers to collect and remit the same state sales taxes that brick-and-mortar stores do. For the third time lawmakers have introduced The Marketplace Fairness Act to close the loophole."Amazon deserves a lot of credit, not only for bringing all those jobs and investment to Ohio, but also for voluntarily agreeing to collect sales tax," Ohio Tax Commissioner Joe Testa told the Cleveland Plain Dealer. "It's a great gesture of support for Ohio, and for all the local governments and transit authorities that benefit from sales tax collections. Given the prominence of Amazon in the industry, this decision to voluntarily collect sales tax may lead other remote sellers to collect and remit tax as well.”You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt – the guy behind TTW...until next week.