New Amazon Sales Tax: It’s Gonna Hurt a Little, But It Could Help NC a Lot

>>2088113758_e4715ef5d5Beginning Feb. 1, North Carolina residents will pay sales tax on all purchases from massive online retailer And although this might put a cramp in your online shopping style, experts say ultimately the new regulations could mean a huge increase in tax revenues for the state.

Under state law, we were already supposed to be tallying up sales tax on online purchases when we paid our annual state income tax, but reports show>> few of us actually did.>> Amazon says it will now charge North Carolina sales tax — between 6.75% and 7.5% depending on the county — at the time of sale.

This feels like another latest hit for North Carolinians facing increased tax burdens in 2014.>> Many state income tax credits have recently ended, and the General Assembly recently passed changes to the tax code adding new fees to entertainment purchases like concert and movie tickets. In actuality this will be a boon to North Carolina’s economy, stimulating state growth in a number of ways.

  • Not taxing online purchases leads to a loss of $190 million a year in revenue. Although at this point only Amazon purchases will be taxed, the tax collected will be significant and will pay for needed services.

  • Taxing Amazon purchases levels the playing field for local businesses. In recent years many have reported an increase in “showrooming,” when consumers browse brick-and-mortar businesses but make purchases online, where prices are lower and there is no sales tax

  • North Carolina is the>> 20th state where Amazon will collect sales tax. Typically it only does so in states where it has offices or distribution centers. Although official plans for Amazon’s expansion to the Tar Heel State have not yet been formally announced,>> The News and Observer reports that the retailer is “considering various opportunities and plans to invest in North Carolina.” An increase in jobs and business revenue will benefit every single North Carolina family.

Losing the sales tax break from Amazon purchases is a disappointment, but it forecasts a positive bigger picture for the state in a time when we need it most. The convenience of online ordering has come with a cost, and it’s great news for North Carolina that it will finally reap the benefits of Amazon’s sales.

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  1. Solomon Gibson III

    Is this really an attempt to sell another picking of the average person’s pocket as a benefit?
    First, what is the definition of “needed services”, and where is there any indication that this revenue will be used to support them? The Republican-led legislature of NC has shown little interest in maintaining services, let alone supplying additional support for them.
    Second, I don’t know about others, but when I’ve comparison shopped, the difference in price is greater than the 7% this sales tax will add; consequently, I’m doubtful this will serve as much of a boost for local businesses. Besides, if Amazon’s recent 30% increase in shipping rates hasn’t done it, why expect a much smaller sales tax increase to level the field?
    Finally, this last bit of reasoning seems to be another example of how states are continually willing to “slit their own throats” in hopes of attracting some big business interest. Tax credits and/or offsets for major industry, while increase taxes/fees, or diminished services, for average citizens.
    Dress this up however you like, it still smells of being another regressive tax on the middle-class that will have minimum impact on truly serving it.

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