RENO, NV - If you shop on Amazon, no doubt you enjoy the cost-savings of not paying any sales tax on your order. But that all came to an end this month, as the company announced it would start collecting sales tax for orders delivered in Nevada. The move not only happened here, but also in Tennessee and Indiana. While you may not like it as a consumer, some local businesses applaud the change.
Bobo's Mogul Mouse has been a fixture in Reno for years.
The shop offers just about anything on the skier's list.
But about eight years ago, employees started noticing a phenomenon called "show rooming."
”So they have a place to come to where they are getting expert advice, they are getting measured and then they are going out and buying it on the internet,” says manager Pat Parraguirre.
A 7% sales tax automatically was added to the bill at Bobo's and any other local brick and mortar store.
It was virtually absent from a sale at Amazon.
“When they buy something on line and they weren't being charged sales tax they are supposed to go and fill out a form and send it into the department of taxation. And I'll let you guess how many people actually did that,” says Tray Abney with the Reno Sparks Chamber of Commerce.
Which put local stores like Bobo's at a distinct disadvantage, and from Parraguirre's perspective--punitively so.
“You and I have to pay taxes; every business in town has to pay taxes. All that money generated in sales tax is going to the general fund. We can fund education, fund police, fund fire, teachers' salaries, all that is going back into the general fund. They are contributing absolutely nothing to ah the infastructure of the state and county,” says Parraguirre.
But that will all change this year as Amazon has agreed to collect the sales tax in Nevada.
The decision was made in part because Amazon has a presence in the state with a distribution center in Fernley.
The state estimates the tax gathered by Amazon could result in $16,000,000 dollars annually.
Collecting state sales taxes for Nevada and all other states through internet sales could be practice in the future.
But it means the “Marketplace Fairness Act” or something like it must pass congress and be signed into law.
While the legislation has passed the Senate, the House has not voted on the measure.
Opponents of the bill say it would force internet companies to configure a way to collect tax in 9,000 different jurisdictions.