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Amazon Will Start Collecting Arizona Sales Tax in February

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Online retailer Amazon will no longer be Arizona's duty-free store.

Amazon noted in its latest FEC filing that it's going to start collecting Arizona sales tax on purchases in the state, which currently stands at 6.6 percent.

This change -- which was apparently caught by the Arizona Republic over the weekend -- comes after quite a bit of complaining from state-level authorities about Amazon skirting the sales-tax in Arizona.

Amazon's SEC filing says the state sent the company a bill for $53 million last year "alleg[ing] that we should have collected a transaction tax that is similar to a sales tax on applicable transactions" from March 2006, through the end of 2010.

"While we continue to believe the assessments were without merit, in September 2012, we entered into a settlement with the State of Arizona that included an agreement that Amazon and its wholly owned retailers collect and remit Arizona sales taxes beginning February 1, 2013, for sales of any physical goods, and July 1, 2013, for sales of digital products or services, as well as resolution of Arizona sales taxes up to those dates and an immaterial payment to the State of Arizona," the Amazon filing says.

Arizona joins eight other states where Amazon customers have to pay a sales tax.

State officials had claimed that Amazon had an unfair advantage over other stores in the state by not collecting the tax, even though the transaction with Amazon -- which is based in Washington -- isn't really taking place in Arizona.

Some light research on the subject seems to dispute the claim that Amazon has an "advantage" by not having to collect sales tax. The advantage is probably in Amazon customers sitting on their asses and waiting for the products to be dropped off at their door.

However, with Amazon owning large distribution facilities around the country, state officials here and elsewhere have argued that its "physical presence" mandates that it collect sales tax.

Thus, prepare for a few more bucks on your Amazon bill starting in February.


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