CHATTANOOGA (AP) – Online retailer Amazon.com has begun emailing Tennessee customers, telling them they might owe taxes on their purchases.
The Chattanooga Times Free Press reported the notification follows the signing of a law about a month ago by Gov. Bill Haslam. The law requires Amazon to begin collecting sales tax on items sold to Tennessee residents, beginning in 2014.
In the interim, Tennessee consumers are liable for a "consumer use" tax that applies to goods purchased online from a company that doesn't collect the sales tax.
The notice from the company informs customers they might owe the tax and details the various divisions of Amazon.com from which goods were purchased. It also provides a link to the Tennessee Department of Revenue's consumer use tax return website, which explains the consumer use tax, who should file and how.
State revenue officials hope the notification might bring in funds under a tax that is often overlooked. It's estimated the tax could generate $22.8 million for the state and $9.6 million for local governments
"It would be extra money for the state," said Billy Trout, a spokesman for the Tennessee Department of Revenue.
The online retailing giant opened distribution centers in Hamilton and Bradley counties in 2011. It plans to build two other centers.
Under a deal struck with the administration of former Gov. Phil Bredesen, Amazon received an open waiver from collecting the state sales tax.
The provision angered many "brick and mortar" retailers and several powerful legislators balked.
In October, Haslam and the company announced an agreement had been reached that Amazon would build two more distribution centers and add 2,000 fulltime jobs.
In an email, Haslam spokesman David Smith said responsibility for collecting the state sales tax moves to the company on Jan. 1, 2014.
Danny Diaz, a spokesman for the Alliance for Main Street Fairness, said telling customers they have a tax liability is not the same thing that other merchants are required to do.
"Amazon.com says it's too complicated to collect the tax; however, it is not too complicated to send notices to all the people who owe that same tax?" he asked.
Information from: Chattanooga Times Free Press, www.timesfreepress.com
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