If you live in Ohio, the next e-book purchase you make is going to cost more. Amazon has announced they have started tacking on an extra sales tax on anything they directly sells.
Ohio has different tax rates, depending on what county you live in and Amazon will have to abide by them all, including the 5.75% statewide tax.
Amazon did not have to charge sales tax in the past, but this all changed with some big announcements. The company is going to be setting up an AWS data center, which is their online infrastructure that powers the webs most valuable properties, such as Netflix. The state is offering Amazon a 15-year tax incentive package for building its data centers in Ohio and creating 120 jobs, exempting Amazon from paying sales tax for equipment for the data centers and offering tax credits tied to the size of the data centers’ payrolls.
The Department of Taxation said for tax year 2013, 50,947 taxpayers voluntarily paid about $3.5 million in use taxes, far short of the estimated $150 million to $400 million. Many industry experts are agreeing that Amazon paying sales taxes would be over $300 million a year.
It is important to note that in Ohio does not charge out of state entities sales tax, stemming from a 1992 Supreme Court decision that ruled Internet and catalog retailers are not required to collect state sales taxes unless they have a physical presence within state borders. Ohio’s deal with Amazon is part of a larger Ohio jobs creation plan in which Amazon pledged to bring 1,000 jobs and three AWS new data centers to the state.
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CNET, Engadget, Huffington Post and Verge.