Maryland’s Up Next for Sales Tax Collection

May 30, 2014

Marylanders should make their online purchases now, as will soon begin collecting sales tax on internet sales made to Maryland customers.  For the last few years, the number of states where the retail giant collects sales tax has skyrocketed, mainly due to the company’s expansion of fulfillment centers across the country.  Maryland will join 21 other states where Amazon collects tax, including California, Florida, Georgia, New Jersey, New York, Texas, and Virginia.

The exact date when Amazon will begin collecting sales tax on Maryland sales is not yet known, as it will coincide with the opening of two in-state facilities being constructed on the south side of Baltimore.  Based on U.S. Supreme Court case from 1992, a retailer is required to collect a state’s sales tax if it has a physical presence in the state.

This could change if Congress passes legislation that is currently being considered by the House.  The Marketplace Fairness Act, which passed the Senate last year, would eliminate the physical presence requirement for states that comply with certain simplification requirements pertaining to the collection and remittance of the tax.  This would result in tax-free online shopping being a thing of the past for customers in most states.  Unfortunately for Marylanders, their tax-free purchases from Amazon will end, regardless of what action Congress takes, so act now if you want to save a few bucks on that purchase you’ve been putting off.

Got questions? Connect with an experienced Aprio advisor today.

Schedule a Consultation