(Updated 11/03/17) Approximately 74% of Americans have to pay a sales tax when purchasing from the online giant Amazon.com. That equates to over 230 million people. As Amazon continues to build distribution warehouses in new states, and thus have to collect sales tax from the residents of those states, this number will only increase. Here is the current list of states where Amazon collects sales tax, along with some timely tips to avoid paying online sales tax in your state.
The Amazon Sales Tax States
Here is an alphabetical list of all of the states that currently collect sales tax on Amazon.com purchases:
- Arkansas – as of 3/01/17.
- Hawaii – as of 4/01/17.
- Iowa – as of 1/01/17.
- Louisiana – as of 1/01/17.
- Maryland – Started collecting sales tax in October of 2014.
- Minnesota – Started collecting tax in October of 2014.
- Mississippi – as of 2/01/17.
- Missouri – as of 2/01/17.
- Nebraska – as of 1/01/17.
- New Jersey
- New York
- North Carolina
- North Dakota
- Oklahoma – as of 3/01/17.
- Rhode Island – as of 2/01/17.
- South Carolina – Starting in January of 2016, South Carolina residents will have to pay a sales tax on Amazon purchases.
- South Dakota – as of 2/01/17.
- Utah – as of 1/01/17.
- Vermont – as of 2/01/17.
- West Virginia
- Wyoming – as of 3/01/17.
I’ll keep this list updated as new states implement Amazon warehouses.
3 Clever Tricks to Avoid Online Sales Tax
So if you live in one of the above states, you’re stuck paying sales tax on Amazon purchases until the end of time. But all hope is not lost. Here are three clever ways to avoid paying online sales tax, and in many cases get free shipping and a price at or below Amazon’s.
- Consider Shopping at Jet.com – Are you aware of the startup Jet.com which is attempting to take a slice of the pie away from Amazon.com? While they don’t offer the same number of products, they’re priced very competitively, and currently ONLY collect sales tax in Kansas, Nevada, New Jersey, New York, and Utah. So, if you live in a state that has a relatively high sales tax, check out Jet and easily save 7-10% off your online purchase. (Update 1/06/17: Now that Walmart has bought Jet.com, they’re going to start collecting sales tax from everyone.)
- Shop Elsewhere Online – Find other websites that offer free shipping similar to Amazon, but don’t collect sales tax except from the single state they’re located in. A good place to start your search is with my article about all of the online retailers who offer free shipping (with no minimum order required). The list of retailers fitting the bill is over 45, and many of them are “online only” and don’t collect sales tax either. A few of the more popular sites include Shoebuy.com, Overstock.com, and even eBay which doesn’t collect tax on most of the auctions you win.
- Offset the Sales Tax That You Do Pay – Consider using popular cashback websites as a way to recapture the money you pay out in online sales tax. Popular sites include Ebates, TopCashBack, and BeFrugal. Essentially they work by offering you a kickback on purchases you make using their links. For example, right now Ebates is offering users 4% back on purchases made at American Eagle.com and 6% back on anything bought from Nordstrom.com. They offer “rebates” at thousands of online retail sites and serve as a nice way to offset the sales tax that you pay.
- Have a Friend Forward Your Mail – Simply have a friend who lives in a state that doesn’t pay Amazon sales tax forward your mail. You can also try a MyUS mailbox.
Ask the Reader: Any other ways to legally get around paying sales tax? Let me know in the comments below, thanks.
By Kyle James