Amazon currently collects sales tax in 21 states, which contain about 60 percent of the U.S. population. These 21 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, Georgia, Pennsylvania, Connecticut, and Kansas) have passed “affiliate nexus” laws, which clarify that Amazon’s in-state sales affiliates constitute nexus for sales tax purposes. (Pennsylvania, Connecticut, and Kansas are also home to Amazon facilities and thus Amazon would be liable to collect sales tax in these states even in the absence of an affiliate nexus law.)
Amazon also has warehouses in South Carolina and is slated, under an agreement with that state, to begin collecting sales tax there in 2016.
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.