ALERT: Alabama’s ‘Amazon Tax’ set to go into effect
MONTGOMERY, Ala. — Beginning November 1, Alabamians will be paying 8 percent extra anytime they make a purchase on Amazon, thanks to the state’s new online sales tax. The tax was signed into law in October of 2015, and forces online companies to collect, report and distribute the money back to Montgomery.
Melissa Warnke, a spokesperson for the Alabama Retail Association, told WSFA that “Amazon, for a long time, has been for paying online sales tax. They have been on the same side of all of the brick-and-mortar businesses that have been fighting for e-fairness.”
Amazon, founded and managed by Jeff Bezos, is the largest e-commerce company in the world from a revenue perspective. The company also produces consumer electronics—notably, Amazon Kindle e-readers, Fire tablets, and Fire TV —and is the world’s largest provider of cloud infrastructure services.
While Amazon is the biggest name subject to the new tax law, it certainly is not alone. Alabama consumers will now be paying more at 52 different online retailers that all have to collect the state’s 8 percent.
Alabama’s Commissioner of Revenue Julie Magee told WSFA the state has received nearly $3 million in general funds since the law went into effect. The law earmarks 75 percent of the revenue to the General Fund Budget and the state expects to receive a $40 to $50 million influx from the tax funds by 2017.
Many proponents of the Internet Sales Tax Mandate describe this as a fight between the Internet and Main Street — big online retailers vs. local mom & pop shops. But opponents not that many of the online retailers who would be hit by this tax are small businesses, just like local brick and mortar stores.
“It’s the big box stores who are spending millions of dollars to pass this legislation,”Yellowhammer‘s Cliff Sims wrote in 2014. “Small businesses should be banding together to fight this overburdensome tax, not allowing propaganda funded by large corporations to tear them apart.”
Other opponents of the tax have also said the increased costs will ultimately just be passed on to consumers, making them the real losers.
As for Amazon, they are betting the tax will hurt their smaller competitors more than them.
Alabamians who typically procrastinate when it comes to online Christmas shopping might want to consider getting at least some of it done before they have to pay an additional 8 percent starting November 1.