In its second-largest acquisition, Amazon buys the company for $970 million.
The e-retailer will start collecting sales tax no later than January 2014.
Amazon.com Inc. will start collecting sales tax on items bought by consumers in Nevada under an agreement announced late yesterday by Gov. Brian Sandoval.
The deal requires the e-retailer, No. 1 in the Internet Retailer Top 500 Guide, to collect the taxes starting Jan. 1, 2014, or earlier if a federal law is enacted that allows states to mandate sales tax collection by online retailers. The terms of the deal with the state’s Department of Taxation is similar to recent deals Amazon has signed with other states, including Virginia, Indiana and Tennessee.
Sandoval, a Republican, says he will work for that federal law. “The only way to completely resolve this issue is for Congress to enact legislation that, within a simplified nationwide framework, grants states the right to require collection by all sellers,” Sandoval said in a statement. “We thank Amazon for creating jobs and investment in Nevada and are very grateful the company is working with us on a federal solution.”
The deal contains no apparent call for Amazon to build more distribution centers in Nevada or create more warehouse jobs. The governor’s office says Amazon has operations in the Las Vegas and Reno areas that employ thousands of workers. Amazon did not immediately return a request for comment.
“Amazon appreciates Gov. Sandoval’s focus on Nevada jobs and his efforts to encourage Congress to resolve the sales tax issue this year,” said Amazon vice president of global public policy Paul Misener in a statement. “We strongly support federal legislation permitting interstate sales tax collection because it is the only way to level the playing field for all sellers, the only way for Nevada to obtain all the sales tax revenue that is already owed, and the only way to fully protect states’ rights.”
The sales tax rate in Nevada varies by county, but most of the state’s consumers pay a general 8.1% rate on purchases, which is what is charged in the the state’s most populous county, Clark County, home to Las Vegas. The Nevada tax deal reportedly will bring in no less than $16 million annually in tax revenue, though state taxing authorities did not immediately confirm that.
Stephen Kranz, partner at Sutherland Asbill & Brennan LLP, will discuss the online tax issue at the Internet Retailer Conference & Exhibition 2012 in Chicago in June in a session titled “The new urgency for developing a state sales tax strategy.”