Amazon is finally being forced to take a hands-on approach to tax collection.
Next year the company will begin collecting sales tax for its third-party merchants in its home state of Washington, according to an announcement made this week through an Amazon sellers forum.
Marketplace Tax Collection, the new service, will automatically "calculate, collect, and remit" sales tax for third-party merchants selling products to customers in certain states, Amazon said. Washington will be first because the state passed a law that goes into effect on Jan. 1, requiring all online marketplaces — like Amazon — to collect sales tax on behalf of its third-party sellers.
This is new territory for Amazon, which to date has charged sales tax on products it sells directly to consumers while leaving it up to sellers on the platform to handle their own tax collection. Those transactions only require a tax if the merchant has a physical presence in the state of the buyer.
Washington is removing that loophole and saying that all internet sales get taxed. Now, if an electronics retailer in Cleveland sells a TV to a customer in Seattle, Amazon will handle the relevant tax collection and payment, regardless of the location of the sender or the fulfillment center.