Amazon.com

[vontar]

I searched and didn't see anyone else post this.

I am posting because I got my letter from Amazon today and I needed to vent a little.

Also wondering if anyone else got them or has opinions.

Amazon is now sending notices to customers in TN about taxes from last year.

http://timesfreepress.com/news/2012/apr/24/a1-amazon-sending-tax-notices-tennessee/

My thoughts on this .....

Amazon.com is sending emails to customers in TN advising them that they might owe TN tax on items they brought last year. I say there was a meeting of the minds at the time of check out and they gave a final price and any taxes due from that point forward that they did not charge customer are the responsibility of Amazon. It is not our fault they did not change enough.

per the attached link ""Amazon.com says it's too complicated to collect the tax; " That is wrong, NewEgg.com started collecting TN tax at check out when they put a location in TN and Amazon can as well. Some of my purchases last year where based on price and I could have went with other vendors such as NewEgg.com.

[Guest bkelm18]

Well, you're supposed to pay tax on pretty much anything you order online and have "imported" into TN. The only difference is, if the company isn't in TN, it's on the buyer to report the tax instead of the company charging you the tax. I'd bet 99% of the people don't pay tax on stuf they buy online. I'm all for Amazon leaving it up to the buyer to report the tax themselves.

https://apps.tn.gov/usetax/

Edited April 25, 2012 by bkelm18

[vontar]

Yea but amazon moved in to the state, kinda like newegg did. Newegg charges it but Amazon does not.

In a way it could be said it gives Amazon an advantage in the market because they don't show tax at check out and people might choose to use them over another business for that reason.

[Guest bkelm18]

Yea but amazon moved in to the state, kinda like newegg did. Newegg charges it but Amazon does not.

In a way it could be said it gives Amazon an advantage in the market because they don't show tax at check out and people might choose to use them over another business for that reason.

Well, yes. I do shop on Amazon because they are cheaper and don't collect tax.

[frankmako]

but in a year or two they will start collecting tn tax when you buy.

[vontar]

I agree with what you posted btw, I just don't like how amazon is doing it. It is like you get a statement at the end of the year. BTW you owe your state this much money. That was not the terms of check out.

I am just saying if taxes are due, the retailer should collect them. I can not leave wal mart with out paying by tax and ask them to send me a notice at the end of the year.

[TripleDigitRide]

You are correct, but the Tennessee government wanted to do almost whatever they could to get Amazon to bring their business into the state. The .gov knows they will lose a relativity small amount of tax money at first, but they expect to bring in many more dollars starting in 2014. They expect Amazon to stick around for a while.

[Garufa]

Amazon moved into Tennessee on the provision that they would not be required to collect sales tax on purchases made inside the state. Bredesen agreed to the deal and Amazon moved in.

The current governor rescinded that agreement after assuming office and Amazon will begin charging sales tax in 2014.

I'll leave the political commentary out of it.

[Guest Lester Weevils]

Am not saying it is either good or bad regarding the internet and state sales tax. Just that amazon must be smoking some pretty good stuff to think they can avoid charging TN tax now that they have a ship center here. The last section of that Free Press article implies that Bredesen made em immune to charging the tax as an inducement to move here.

If amazon thinks it can skate on tn tax because it is too complicated, they are smoking some purty good stuff. Apple and Hewlett Packard, among others, have offices in TN and have charged TN tax on TN web-orders as far back as I can remember. Like ten or more years ago. Long ago if I web-ordered from Apple or HP, tax was charged regardless what state the goods would ship from, just because they have at least one office in TN. Amazon can't argue they are "too big" to collect the tax compared to Apple or HP. Walmart, Best Buy, Harbor Freight and Northern Tools charge TN tax on web orders and have done so for many years.

Some "obscure" computer suppliers I've ordered from for years, who have drop-ship points in TN. I get the impression the area around Rockwood and Kingsport has lots of ship warehouses, just from reading return labels on packages. Some of those west coast specialty suppliers, I might order a bunch of stuff and the parts that drop ship from out of state are tax-free and the parts that drop ship from in-state add tax.

Maybe there is some way we could cut big mail order companies sales tax breaks and attract lots of warehouse jobs. But because our state has no income tax and basically runs on sales tax, maybe it would be a tricky thing.

[Motasyco]

You mean that wasn't spam? Oops, too late.

[Guest Lester Weevils]

You mean that wasn't spam? Oops, too late.

Email? What email?

Amazon moved into Tennessee on the provision that they would not be required to collect sales tax on purchases made inside the state. Bredesen agreed to the deal and Amazon moved in.

The current governor rescinded that agreement after assuming office and Amazon will begin charging sales tax in 2014.

I'll leave the political commentary out of it.

Politician speak with forked tongue. Move teepee to happier hunting grounds.

[KJ48]

The internet sales tax free ride is coming to an end everywhere. The deal the Governor cut with Amazon is they wont have to collect the TN tax until 2014, until that point Amazon must send TN residents how much they bought and a link to where to pay it. Its not Amazon's decision to send the e-mails, Amazon also (at least at this time anyhow) will not share any user data with the state. So far the Supreme court says they dont have to share that data, we'll see how long that lasts.

Its a double edged sword, TN has no state income tax and they depend on sales tax for revenue. Its really the state's fault no one pays the use tax, they dont push it at all (I have never heard of it in TN until someone told me about the Amazon e-mail). Many other states have it along WITH an income tax. For example Illinois charges you 5% of your adjusted gross income for state income tax. And on top of that they charge a 6% use tax like TN, except you have to report it on on the tax return, if you put '0' on that line you are now a tax evader. You can also be somewhat honest and let them take .06% of your AGI for use tax if you have no documentation. Also if you buy something out of state and bring it home you are expected to pay the difference in tax if its less as well, so pick up a book on vacation in NH for 3% sales tax and the state of TN expects you to pay them the difference in tax - really.

Tennessee needs to do something a little better if they want to collect that money, lot of people buy little things from eBay/Amazon etc and dont keep detailed records. The TN website is like something for the 80s for use tax. They only take debit and credit cards, and charge an extra 2.9% if you use a credit card. IMO if they just did something like Illinois and let you pay a tiny percentage of your AGI on your federal return for use tax they would at least get something, but I'm sure the anti state income tax people would start screaming. Who is going to list every single internet purchase they make in a year these days, plus some places charge tax and some dont so you would need to be an accountant to keep accurate records. The TN website form wants you to list every single purchase, including downloaded software and songs.

They really need to streamline it if they want to collect some money voluntarily, Plus I have a feeling once you make a payment and give them your SS number you will be hearing from them again. I have nothing against paying the sales tax, even on out of state purchases. But no one pays me to keep records on personal purchases, let Amazon or whatever seller collect the tax. Amazon has offered to collect the sales tax for their 'partners' at a 3% charge so they are more than able to do it. I dont buy on the internet to save sales tax, I do it so I dont have to deal with traffic, idiots in parking lots and stores never having what I want and wasting hours of my time. Plus some things just cant be purchased at local retail stores, say you want some small gun parts or parts for an old Kenmore range.

Its only a matter of time before the feds get involved and every single thing you buy online will be reported to them and the state. I dont use Amazon much but I buy books and movies for the kids occasionally, and they have every single purchase I made online from them since 2002 available for me to download, both the value and exactly what it was. Plus your bank has pictures of every check you wrote since 2000 or so, credit card company has every purchase you ever made on file as well, so does eBay, paypal and the rest. Once the states get a hold of that they can see what you have been buying and what you owe them.

Edited April 25, 2012 by KJ48

[daddyo]

I'm sorry, but making taxes retroactive is bull . I've already paid for my goods from last year.

Edited April 25, 2012 by DaddyO

[Oh Shoot]

I'm sorry, but making taxes retroactive is bull . I've already paid for my goods from last year.

Nothing retroactive about it. TN residents have always owed sales tax on this class of items.

- OS

[daddyo]

Nothing retroactive about it. TN residents have always owed sales tax on this class of items.

- OS

If I pay for merchandise, and then someone comes back later and says "Oh, we need to charge you tax on those items", then, yes, it's retroactive.

[KJ48]

If I pay for merchandise, and then someone comes back later and says "Oh, we need to charge you tax on those items", then, yes, it's retroactive.

If you live in TN and buy a car from GA you have to pay the tax on it when you register it at a later date, try to make that point to the county clerk when you try to get plates and a title.

I'm not one of those people who will tell anyone what to do or not to do. I lived here for seven years and had no idea there was a use tax on internet goods shipped here, not once did my tax preparer mention it (except that I could write off major purchase state tax on my federal return). I'm not a dummy, and I know ignorance of the law is no excuse, but until I started reading about this Amazon stuff I had no idea I was supposed to record and pay for internet purchases in TN. The state should really get the word out, I bet a lot of people that lived here their whole life dont have a clue about the use tax, mater of fact everyone I talked to today at work had no idea what I was talking about.

From now on I'll just buy from online vendors who charge tax, so I guess Amazon is out. That should eliminate me being my own purchaser, accountant and tax assessor just to buy a pair of shoes for my kid

Edited April 25, 2012 by KJ48

[Guest bkelm18]

If I pay for merchandise, and then someone comes back later and says "Oh, we need to charge you tax on those items", then, yes, it's retroactive.

There's not a thing retroactive about this. You have ALWAYS had to pay a use tax on these items. They are simply reminding you of that. Retroactive would be TN enacting a new tax and trying to levy that tax on goods already purchased.

[daddyo]

Hmmm. Seems to fit the definition to me....

retroactive [ˌrɛtrəʊˈæktɪv]

adj

1.

applying or referring to the past

retroactive legislation

2.

effective or operative from a date or for a period in the past

[BryanP]

If I pay for merchandise, and then someone comes back later and says "Oh, we need to charge you tax on those items", then, yes, it's retroactive.

Except that's not what's happening. This tax has been in existence for many years, it's just that they pretty much have to rely on people voluntarily paying it. And technically that's still the case as Amazon isn't directly reporting this information to state govt. They're just making a point of reminding you about it.

What would be interesting would be if Amazon supplied the sales data to the State Dept. of Revenue and they in turn decided to try and enforce the use tax.

[Oh Shoot]

If I pay for merchandise, and then someone comes back later and says "Oh, we need to charge you tax on those items", then, yes, it's retroactive.

Amazon isn't telling you to pay tax.

State of TN says you must pay sales tax every year on items brought into state for your use here. Nothing has changed.

- OS

[vaiger]

Except that's not what's happening. This tax has been in existence for many years, it's just that they pretty much have to rely on people voluntarily paying it. And technically that's still the case as Amazon isn't directly reporting this information to state govt. They're just making a point of reminding you about it.

What would be interesting would be if Amazon supplied the sales data to the State Dept. of Revenue and they in turn decided to try and enforce the use tax.

+1. Try driving across state lines and buying $2,000 worth of furniture in NC and having it shipped to your home in TN. Many people have done this and then they get a sales tax bill in the mail from TN for the "use" tax. They are pretty good about catching use tax in certain industries, but most folks don't even know it exists. The use tax applies to both businesses and individuals. If you buy a car, boat or motorcycle that needs tags, you will get hit for the sales tax when you title it. Other purchases you make online are no different, you just have not been caught.

There was a streamline sales tax project that TN was trying to adopt along with many other states that were in a multi state tax compact, but that failed. That project would have caused more businesses to collect sales tax on out of state purchases, but there are just too many taxing jurisdictions with too many different rates and rules for it to work efficiently.

Filing the TN Comsumer Use Tax return starts your 3 year statute of limitations for examination and additional tax assessment, so you really should consider filing to limit yourself to 3 years of exposure. If they were to audit you and you have not filed a return, they are not limited to assessing tax for only three years. What if they audit and you don't have records going back beyond three years? That's okay, they just average what you owe for known years and assess that tax for years in which you don't have records.

For businesses, if you fail to file a requried return (Gross Receipts tax for example), the TN Dept of Revenue just makes up a huge number ($1,833 for example) and sends you a bill for that to get your attention. You can respond by paying their assessment, or more commonly, by freaking out and immediately mailing a correct return for the $46 you really owe. I could see them doing something like this for individuals one day as the state struggles to bring in additional tax revenues.

Also, contrary to popular belief, TN does have an income tax. It is just a tax on certain items of income (certain interest, dividends, s-corporation distributions, etc). If my investment company mailed me a letter and reminded me of my responsibility to file the TN income tax return and pay tax on my dividends, I would not consider that to be a retroactive tax.

If you have a business, pay attention to the TN Unclaimed property rules as that could be a huge area of exposure as well. Many companies have paid huge amounts of unclaimed property tax due to sloppy bookkeeping rather than having true unclaimed property. Again, filing a return starts your statute of limitations which is a good thing.

Yeah, it stinks to have to go through your records and figure out what items you owe use tax on every year, but it is the law. I did not mind Amazon's email to remind me to pay tax on purchases that I already knew I owed tax on.

Man, I really hate to pay taxes, but one good thing about the law is that if everyone were to abide by it, it would eliminate an unfair advantage for out of state businesses and encourge more folks to buy local.

[KJ48]

+1. Try driving across state lines and buying $2,000 worth of furniture in NC and having it shipped to your home in TN. Many people have done this and then they get a sales tax bill in the mail from TN for the "use" tax. They are pretty good about catching use tax in certain industries, but most folks don't even know it exists. The use tax applies to both businesses and individuals. If you buy a car, boat or motorcycle that needs tags, you will get hit for the sales tax when you title it. Other purchases you make online are no different, you just have not been caught.

There was a streamline sales tax project that TN was trying to adopt along with many other states that were in a multi state tax compact, but that failed. That project would have caused more businesses to collect sales tax on out of state purchases, but there are just too many taxing jurisdictions with too many different rates and rules for it to work efficiently.

Filing the TN Comsumer Use Tax return starts your 3 year statute of limitations for examination and additional tax assessment, so you really should consider filing to limit yourself to 3 years of exposure. If they were to audit you and you have not filed a return, they are not limited to assessing tax for only three years. What if they audit and you don't have records going back beyond three years? That's okay, they just average what you owe for known years and assess that tax for years in which you don't have records.

For businesses, if you fail to file a requried return (Gross Receipts tax for example), the TN Dept of Revenue just makes up a huge number ($1,833 for example) and sends you a bill for that to get your attention. You can respond by paying their assessment, or more commonly, by freaking out and immediately mailing a correct return for the $46 you really owe. I could see them doing something like this for individuals one day as the state struggles to bring in additional tax revenues.

Also, contrary to popular belief, TN does have an income tax. It is just a tax on certain items of income (certain interest, dividends, s-corporation distributions, etc). If my investment company mailed me a letter and reminded me of my responsibility to file the TN income tax return and pay tax on my dividends, I would not consider that to be a retroactive tax.

If you have a business, pay attention to the TN Unclaimed property rules as that could be a huge area of exposure as well. Many companies have paid huge amounts of unclaimed property tax due to sloppy bookkeeping rather than having true unclaimed property. Again, filing a return starts your statute of limitations which is a good thing.

Yeah, it stinks to have to go through your records and figure out what items you owe use tax on every year, but it is the law. I did not mind Amazon's email to remind me to pay tax on purchases that I already knew I owed tax on.

Man, I really hate to pay taxes, but one good thing about the law is that if everyone were to abide by it, it would eliminate an unfair advantage for out of state businesses and encourge more folks to buy local.

Can you go to NC and buy furniture at a store without paying NC sales tax? If you pay NC sales tax dont you only have to pay the difference between NC and TN tax? Last car I bought in GA and they didnt charge me any tax, but I did have to pay when the MSO got here and I registered it of course.

Seems you are familiar with tax laws here, all I have is a couple days of internet research. Anywhere where I can read about the three year statute of limitations online? Like I posted earlier I have no problem paying the tax, I dont buy that much online but have no problem with the state getting the money.

I know it sounds silly that I dont know about the use tax after living in TN seven years but honestly I had no clue. What concerns me a bit is if I do pay the tax from last year that it will trigger them to come and look for more money, I honestly have no idea what I spent in the last three years besides Amazon since the keep those numbers since day one. But I'd rather be limited to three years instead of ten of course.

I'm sure I'll buy some internet items but I'll just try to buy from places that charge the tax and keep receipts. If they want to go back three years after I file and go after me thats fine with me, but good luck trying to figure out what I bought - I dont even know

Edited April 26, 2012 by KJ48

[vaiger]

If you buy the furniture while in NC and take posession of it in NC (i.e. load it up in your truck to take it home), that is a NC sale subject to NC tax. If you instead have it shipped to you, NC will most likely not charge you tax and you would pay the TN tax instead.

TN has had some voluntary disclosure agreements in the past where they encouraged folks to come forward, start filing and just pay tax and interest for three or four years in exchange for waiver of penalty and closing the statute on older tax years. I haven't seen a VDA program for consumer use tax and I suspect there won't be one.

For most folks, the amounts of sales tax we are talking about are immaterial in the grand scheme of things. I would hope the TN DOR would not send an auditor to camp out at your house for three days to collect sales tax on $1,500 of purchases. I think if you start filing now that you know, that is a very good start toward being in compliance. If you are worried about older years and want advice, send me a pm. I am a CPA in public accounting and I am somewhat familiar with TN sales tax issues (although that is not the primary focus of my practice). I am not soliciting business, but I would be happy to give you some general thoughts if the matter causes you concern.

[KJ48]

If you buy the furniture while in NC and take posession of it in NC (i.e. load it up in your truck to take it home), that is a NC sale subject to NC tax. If you instead have it shipped to you, NC will most likely not charge you tax and you would pay the TN tax instead.

TN has had some voluntary disclosure agreements in the past where they encouraged folks to come forward, start filing and just pay tax and interest for three or four years in exchange for waiver of penalty and closing the statute on older tax years. I haven't seen a VDA program for consumer use tax and I suspect there won't be one.

For most folks, the amounts of sales tax we are talking about are immaterial in the grand scheme of things. I would hope the TN DOR would not send an auditor to camp out at your house for three days to collect sales tax on $1,500 of purchases. I think if you start filing now that you know, that is a very good start toward being in compliance. If you are worried about older years and want advice, send me a pm. I am a CPA in public accounting and I am somewhat familiar with TN sales tax issues (although that is not the primary focus of my practice). I am not soliciting business, but I would be happy to give you some general thoughts if the matter causes you concern.

I will pay for 2011 to the best of my knowledge (I dont save receipts unless there is some sort of warranty involved) and see what happens, either they will thank me for the payment or they will think they can get more and audit me lol. I'm going to keep all the receipts this year and try mostly to buy from vendors that charge the TN tax if I buy online. I spend plenty locally, internet shopping for my wife and I is a simple a matter of convenience, not trying to cheat the state out of 10%.

Lot of people are mad at Amazon about this, I know there is different local taxes that need to be charged but I would think it wouldnt be that hard for them to figure it out to charge sales tax on online sales. I will just avoid them unless they are the only people that have what I want, saving 10% certainly isnt wort the hassle. I have a feeling TN is going to start to get more aggressive at collecting the use tax now that its out there.

Appreciate the reply

[gjohnsoniv]

Buy local!