Online retail giant Amazon.com will begin collecting state sales tax on all orders shipped to customers in Maine beginning April 1.
The decision to start collecting Maine’s 5.5 percent state sales tax is part of a nationwide policy reversal by the Seattle-based company, which has previously resisted collecting sales tax in many states.
Amazon has begun collecting state sales taxes in at least 10 other states since Jan 1. Tax collection began Jan. 1 in Louisiana, Iowa, Nebraska and Utah; Feb. 1 in Mississippi, Missouri, Rhode Island, South Dakota and Vermont; and March 1 in Wyoming.
In addition to Maine, Amazon will start collecting sales tax in New Mexico on April 1. That will leave only a handful of remaining states in which the company does not collect state sales tax.
Commissioner George Gervais of the Maine Department of Economic and Community Development issued a statement Monday applauding Amazon’s decision to begin collecting and remitting sales tax in Maine.
“Today’s decision by Amazon is welcome news to Maine retailers and consumers,” he said. “Maine businesses can go toe-to-toe with the very best out-of-state companies, provided they are competing on an equal playing field. Amazon’s decision to collect and remit sales tax to the state of Maine is an important first step in leveling the playing field.”
The increased tax revenue could help lawmakers reduce the state’s income tax burden, Gervais said.
Prior to 2017, the e-commerce giant had dragged its feet for years on collecting sales taxes in small and sparsely populated states where it doesn’t have any distribution centers or corporate offices, according to The Associated Press.
To avoid collecting taxes, Amazon has historically relied on a U.S. Supreme Court ruling that predates the era of online shopping. That 1992 decision bans states from forcing out-of-state retailers to collect taxes if they don’t have a physical presence in the state.
However, Amazon’s policy reversal followed another Supreme Court ruling in December that rejected a challenge to a Colorado law requiring online sellers to notify customers about how much they owe in taxes. Colorado officials had estimated they were missing out on as much as $172.7 million a year.
Maine officials did not respond Monday to requests for an estimate of the increase to Maine state coffers from the additional sales tax. Rhode Island, which has long fought for Amazon to remit sales taxes, has said it is now counting on nearly $35 million in tax revenue next year from the company and other online retailers that follow its lead.
J. Craig Anderson can be contacted at 791-6390 or at: