Mississippi’s chief tax collector has announced that internet retailing titan Amazon will collect Mississippi’s 7 percent sales tax beginning Feb. 1.
“I appreciate Amazon for voluntarily stepping forward to collect the Mississippi sales tax,” Revenue Commissioner Herb Frierson said Tuesday in a statement. “I hope that other e-retailers will follow the lead of Amazon.”
Those other sellers may not have any choice. The department filed Jan. 12 to implement an administrative rule that would require all companies making more than $250,000 in sales in Mississippi each year to collect the state sales tax and remit it to the state, whether they sell by internet, paper catalog, or both. Companies would be required to start collecting the tax beginning July 1, assuming the rule completes the review process required under the administrative procedures act.
“If they do this voluntarily, we won’t go back and do a three-year audit on them,” Frierson told The Clarion-Ledger. “I hope Amazon causes other people to want to do this. It’s the painless way of getting it done.”
At least three bills have been introduced in the current legislative session to require companies that sell more than $250,000 to pay, although committees haven’t acted on any of them.
“Amazing what a little hard work and pressure can do,” tweeted the sponsor of House Bill 480, Rep. Trey Lamar, R-Senatobia. “Mississippians finally will collect what is owed to them.”
Frierson said Amazon is by far the largest online seller in Mississippi. He said he can’t divulge Amazon’s estimate of how much the tax will bring in for Mississippi, but that it’s “south of $30 million a year, and north of $15 million.”
“It will be a big help for (the 2018 fiscal year budget),” Frierson said. “It won’t solve all our problems, but it will be a help.”
Lawmakers could have to cut $200 million in spending if they reinstate a 2 percent budget reserve, as Gov. Phil Bryant and legislative leaders seek. They face lagging revenues and increasing Medicaid costs.
It’s unclear if the Revenue Department plans to send cities the 18.5 percent that they normally receive from sales within their borders.
Mississippi isn’t the only state where Amazon has agreed recently to start collecting at least some sales taxes. The company began collecting taxes in Alabama in November and in Louisiana, Nebraska and Iowa on Jan. 1. Mississippi will be at least the 32nd state where Amazon customers pay sales tax.
Mississippians are already theoretically on the hook for online purchases. They’re supposed to fill out an amount equal to sales taxes for online and catalog purchases on their income tax return each year — what’s called a use tax. However, state officials say few people pay the tax and they have no realistic way to enforce it.
The U.S. Supreme Court ruled in 1992 that it would be impractical for remote sellers to collect and remit sales taxes across state lines to thousands of jurisdictions nationwide. While every Mississippi city but Jackson and Tupelo charge the state’s uniform 7 percent rate, sales tax rates differ among cities and counties elsewhere. Colorado is asking the high court to reverse that ruling and Mississippi Attorney General Jim Hood in November joined 10 other states in filing a brief in support of Colorado.