Last update: Nov. 5, 2013
Amazon currently collects sales tax in 16 states, which contain more than half of the U.S. population. These states are shown in dark blue and dark green. In the dark green states, Amazon has a physical presence, such as a warehouse, and thereby has sufficient “nexus” for the state to compel it to collect sales taxes owed by in-state residents. The dark blue states (New York, California, and Georgia) have passed “affiliate nexus” laws, which clarify that Amazon’s in-state sales affiliates constitute nexus for sales tax purposes. (Pennsylvania and Kansas are home to Amazon facilities and have also adopted affiliate nexus laws.)
With its network of distribution facilities growing, Amazon is also slated, under agreements with states, to begin collecting sales tax in several other states (shown in light green) over the next four years. (One of these, Connecticut, has also enacted an affiliate nexus law.)
Seven more states (light blue) have enacted affiliate nexus laws, but Amazon is not collecting sales tax in these states, either because it has terminated its in-state sales affiliates (e.g., Missouri), the law has not yet taken effect (Vermont), or the law has been suspended because of a court case (Illinois).
For more background and information on internet sales tax, including the approaches taken by the states, as well as proposed Congressional legislation, see our Internet Sales Tax Fairness page.