The Party’s Over! Illinois Amazon Customers Will Soon Pay Sales Tax
The bargain Amazon that once was will no longer be if you live in Illinois.
As reported here, Amazon announced that they will be building a facility in Illinois. The good news is that a large number of jobs will be created to build the facility and to provide the staffing required to operate the facility. Amazon announced it will invest $75 million to build the facility and will create 1,000 jobs over three years.
However, the decision to build facilities in Illinois will require the online retailer to collect sales taxes from Illinois residents. By law, it will have to.
Government officials in Illinois have trying for years to force Amazon and other online retailers to collect sales taxes for items sold to Illinois residents. However, federal court decisions in the past have exempted online retailers from collecting state sales taxes unless they have a facility in that state.
Amazon spokesperson Nina Lindsey told the St Louis dispatch “We will begin collecting sales tax in Illinois when required by law."
Bill Karr, president of the Illinois Retail Merchants Association told the newspaper:
That will happen when Amazon opens its Illinois centers. It settles it for this company, although other online retailers will still avoid the tax.
Brick and mortar retailers complained for years that online-sellers have an unfair advantage because buyers can skip sales taxes.
The statewide sales tax in Illinois is 6.25 percent. In Rockford the rate is 8.25 percent. A $500.00 purchase on Amazon, once the Illinois facility is open, will cost Stateline residents an additional $41.25 on average.
The first Illinois facility is expected to open in some time in 2015. The location has not been announced yet.
In the past, the company had tended to avoid placing facilities in states with large populations to avoid charging sales tax.
The Illinois Supreme Court last year struck down an Illinois state law that required tax collections by online companies with “affiliates” in Illinois.
The State of Illinois does require individuals who make on-line purchases to pay the sales taxes on those purchases when you file your income tax return in April. Very few people do because there is no way for the state to monitor your purchases. The honor system is in place here.