Are you less likely to buy online when you have to pay sales tax?

In file photo, a worker sorts packages at an Amazon.com fulfillment center in Goodyear, Ariz. Ross D. Franklin/ AP 2010

“Minnesotans don’t have much longer to get orders from Amazon.com tax-free,” writes MPR News reporter Martin Moylan.

Starting Oct. 1, the online retailer says it will start collecting sales taxes from Minnesota residents. Online-only retailers don’t have to collect state sales taxes if they do not have a physical location in a state.

But Amazon also says it is considering various opportunities to expand in Minnesota.

The retailer has been collecting sales taxes in an increasing number of states as it establishes warehouse or other operations in them to speed the delivery of goods.

The state revenue department estimates Minnesota loses $400 million a year in uncollected sales taxes for online, catalog and other purchases made by state residents. Richfield-based Best Buy has long complained that the sales tax exemption for online merchants gives them an unfair price advantage.

Today’s Question: Are you less likely to buy online when you have to pay sales tax?

  • Pearly

    No. I will still buy online

    • It is a matter of convenience for you?

      • Pearly

        Yes. But no sales tax is a bigger incentive to buy online.

        • mdt

          Pearly with the bullseye.

  • Jim G

    No. I willingly pay taxes. Taxes are the price we pay to live in a civilized country with laws and courts to make markets more fair than they would be if big corporations had their way. Taxes pay government agencies to protect citizens from the native inclination to take as much as possible, as quickly, as possible without attending to the mess their activities cause. An example: older stronger siblings taking more than their share of food from the table. Little brothers and sisters get the left over scraps and then have to clean up the mess their bully siblings have made. A parent needs to set the rules for table behavior. Taxes make government strong enough to be that overseeing authority.

    • Bill

      You need serious psychological help.

      • Jim G

        Dr. Bill?

  • a_tribe_called_chris

    It will be another consideration for me. I realize that
    taxes are what we pay for a functioning society but our state is a bit
    overboard with their millions of way to tax everything. I already pay income
    tax and property taxes on top of sales taxes on local purchases. Amazon won’t
    be my default e-tailer after 10/1 due to this. So for example, they won’t
    likely see my Christmas/Holiday gifts sales any longer. They have lost some of
    their pricing competitiveness already as Walmart or Target often has the same
    pricing for items I am shopping around for. Now factor in the wash of the sales
    tax it’s simply a matter of convenience which in most cases Amazon won’t beat
    for me. Oh well, I will continue to consume less anyway so that will keep my
    sales tax burden lower.

  • ugfsandy

    Taxes for companies doing business in the state is only fair. Amazon’s new incredibly slow shipping policies mean I will be buying far less either way.

  • Rich in Duluth

    No, I have been surprised that no sales tax is added, when I’ve encountered this with my online purchases. I live in Minnesota and when I purchase something in Minnesota, I expect to pay the sales tax. Amazon’s “store front” presence is in Minnesota, when it’s in my home.

    I actually see online sellers that do not collect sales tax as having an unfair advantage over local, brick and mortar sellers.

  • Dennis Strassburg

    I don’t think it will change my buying habits much. I try and shop local, but the selection of products is why I shop online. Brick and mortar stores have very little anymore that interest me. Add in the crowds, and I’d rather shop from my home and have time for other things.

  • BCSWowbagger

    Um, yes. Obviously. Perhaps it was always unfair that online businesses were able to avoid charging sales tax, perhaps it wasn’t, but that was definitely a loophole I took advantage of while it lasted, driving more of my business online than would otherwise have been the case. I’d even go so far as to say that anyone who says otherwise is fibbing.

  • Susan WB

    Not really. I never did it on purpose to avoid paying sales tax. Shopping online is more about convenience and choice of products for me. Amazon has what I want, and they’re almost never out of stock like my local brick-and-mortar stores are. Plus I have Amazon Prime, which gives me free (well, already paid for) 2-day shipping. I don’t see myself dropping that, which means Amazon has an edge over any other online retailer for me. I might pay a little more in tax, but save twice as much on shipping. And if I buy local, I have to pay sales tax and the gas to drive to the store, and deal with lines and crabby people. I’ll stick with Amazon.

  • Carlene Dean

    In theory, it wouldn’t make a bit of difference to me. For one, I prefer buying many things online because it saves me from having to drive somewhere, put up with other shoppers (such as during the Christmas rush, during which I’d far rather just stay home and avoid the crowds of crabby people). Secondly, paying taxes is inevitable in this life; it’s how towns, counties, the state and federal governments function, by using our tax dollars. So no, this won’t affect my habits at all.

  • Central MN

    Normally, no. When I shop online it’s for convenience and/or to purchase products unavailable locally. However, the few times I’ve shopped at Amazon, the experience has been difficult, complicated and sometimes unpleasant. Now, the only time I will shop Amazon is if I’m given a gift card. No taxes would ease that pain a bit.

  • bob hicks

    E-tail shopping is so quick and environmentally friendly in comparison to driving to a brick and mortar store location, that an online sales tax by Amazon or any other e-tailer isn’t gonna change the frequency or nature of my online shopping and buying habits.

  • Mark in Ohio

    Most of what I buy on-line is stuff I can’t find in physical stores, or stuff I’d have to drive a ridiculous distance for, such as 1 to 1 1/2 hours one way for one item. I find the selection of products available at most local stores is depressingly small and lacks variation between stores and chains. I’ll admit to being picky about what I buy, so I find that I frequently use Amazon, along with numerous other on-line vendors, some of which do charge sales tax. Amazon charging sales tax won’t affect me one way or the other.

  • Jeff

    I will find another online retailer…I’m well within my legal rights as a Minnesotan that I should be able to make out-of-state purchases without paying sales tax up to $770/year.

  • pstew96

    I figure the tax savings offset the shipping costs.

  • Sylvia F. Dion

    I am tax consultant and avid blogger/writer that has been writing about “Internet Sales Tax” for the past four years. Here’s what I say over and over and over – sales made over the internet are NOT ‘tax-free’. If the vendor did not charge sales tax, then the purchaser is required to pay a use tax to the state. In Minnesota Sales Tax Fact Sheet 156, “Use Tax for Individuals,” the MN Department of Revenue explains what the use tax is, when it is owned, that the use rate is the same as the sales tax rate and how/where to report and pay it. http://www.revenue.state.mn.us/businesses/sut/factsheets/FS156.pdf

    So Amazon charging sales tax won’t keep me from buying from Amazon – I know the tax is still owed – plus online shopping has many advantages, e.g., shopping from the comfort of my home, selection.

    Here’s another thing to keep in mind. Amazon is also a marketplace – with thousands of marketplace sellers. If you purchase goods from “Amazon”, you may very well be purchasing goods from a marketplace seller that isn’t required to charge and collect sales tax. This means that not all purchases made from Amazon’s site will have sales tax charged on them even if those purchases are made after September 30th. http://www.salestaxsupport.com/blogs/sales-use-tax/internet-tax-ecommerce/amazon-tax-to-clear-the-confusion/

    • Jeff

      You left out the most important part of MN sales tax law:
      “Purchases made by an individual for personal use are
      exempt from use tax if the individual’s total purchases
      subject to use tax are $770 or less in the calendar year.”

      I think most people’s purchases fall within that exemption.