Amazon has always fought with state governments about taxes, and it seems the war has been renewed once again. Since its establishment, the retail giant has refused to adhere to state sales tax, and this is one of the reasons why most of its prices are low especially when bought from the commercial site. This is something that has angered many retailers as well as politicians until the retail giant began adhering to the tax in states. Nonetheless, there appears there was a loophole. The New York Times has confirmed that most of the items that had the tax added originated from the inventories that were owned by the retail giant. On the other hand, the millions of merchants who sell their products on Amazon as independents were not subjected to these tax increments. As a matter of fact, half of the products sold on Amazon originate from these sellers. This means that Amazon is the only beneficiary of the tax that is collected from these merchants. This information has been revealed by the accountants from both sides, tax lawyers familiar with the situation and sellers involved in the platform. It has emerged that states that feel that they were rightfully denied their money have decided to come after their money.
This is the reason why Amazon recently released a statement warning sellers that it will start collecting these taxes in its home state of Washington. This is seen as an effort to comply with the law that came into effect in July. This will go down as the first time that Amazon collects state sales tax. At the moment, the company is fighting a lawsuit in the state of South Carolina. The Department of Revenue at the state wants to use laws that have been existing to force the retail giant to collect these taxes. The department argues that the retail giant has denied them taxes worth over $57 million in the last one year. The case will be determined by a state judge in the coming few weeks. In the state of Washington, a state judge asked Amazon to comply with an order that requested the information about merchants who were storing goods in the state of Massachusetts. This has been the case in California where sellers say they have received letters from tax investigators. If the state governments go after Amazon successfully, some of the effects will be felt by customers are prices of commodities is likely to go up.