Amazon “use tax” hits North Carolina

Nicole Johnson, Copy Editor

Online retail company Amazon began charging sales tax to North Carolina customers Feb. 1 2014. This move made North Carolina the 20th state with the tax and provided aid to an ongoing movement to make collecting online sales taxes an universal practice.

Amazon announced their decision to charge a “use tax” on North Carolinians’ purchases from their site Jan. 20 2014. The announcement was met with mixed reactions. On one hand, customers were unhappy with having to pay more for their purchases. However, the tax could bring an estimated amount of at least $30 million to North Carolina.

“The department is pleased with this outcome, and believes it is an important step in the effort to ensure all North Carolina taxpayers are treated equally,” said Trevor Johnson, director of public affairs with the North Carolina revenue service, in an interview with hpe.com.

There has been a major push for Amazon to start taxing its customers recently. A driving force behind this has been a decrease in purchases from small businesses, which do not have an option to buy online. Supporters of the tax feel that online retailers such as Amazon have an unfair advantage.

“I think it’s a necessary evil, in the order of business. The fact is, it is hard to run a business that large without a tax system in place,” said Poojan Mehta, junior.

It is already required in North Carolina that citizens pay taxes for online purchases. However, that rule is weakly enforced, especially with out-of-state retailers. This lack of enforcement has been harmful to the state for years as the amount of consumers choosing to buy online increases.

Money gathered from state sales tax goes directly to the state’s legislature. The legislature can then apportion the money for whatever it deems necessary. The majority of North Carolina’s revenue comes from sales tax.

While the new tax could prove beneficial to North Carolinians, some of the state’s residents are strongly opposed. Criticism has ranged from the tax being unfortunate and unfair to it being a violation of the United States Constitution.

The Constitutionality of an online sales tax was recently called into question in another state. The District Marketing Association of Denver, CO recently put in a request to have a use tax established for Colorado residents. The request was subsequently denied by a Denver judge, who said the tax was unconstitutional under the United States Constitution’s Commerce Clause. The Commerce Clause states that “state laws may not discriminate against or burden interstate commerce.”

The Revenue Department responded that the Commerce Clause “was intended to foster an open national market, not … to shield retailers doing substantial business within a state from reasonable state laws.”

It is likely that online sales taxes will always be controversial, it appears that they are here to stay. As the amount of people choosing to shop online increases, so will the push for more regulations.