Party Is Over: Amazon to Charge Sales Tax as of Sunday

Get your orders in by Saturday at 11:59pm, because as of 12:01 am you will pay 6.25 % more.

People who live in Illinois and shop on Amazon.com will pay more beginning on February 1st due to a new state law. The law is intended to boost tax revenue for the state and help local retailers who have a disadvantage over many online retailers because they already  have to impose the sales tax.

The law went into effect on January 1st in Illinois requires that online retailers collect sales tax from Illinois shoppers. A short grace period was added to the law to give on-line retailers time to comply.

Last Friday, retail giant Amazon announced it will comply starting February 1.

Capitol Fax reports that Amazon sales are likely to decline about 10 percent in Illinois if its pattern follows those of other states. Itzhak Ben-David, an associate professor of finance at Ohio State University studied the effect of the Amazon tax issue on consumer behavior in five states that implemented online sales tax laws from 2012 to 2014.

The decline was most dramatic for large purchases, for example, he and colleagues measured a sales decline of nearly 25 percent on purchases of $300 or more.

In October, the Amazon.com  announced it plans to build facilities in Illinois within the next two years.