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Non-Time-Travel Subjects > Amazon and IRS Tax

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message 1: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments I just got an email from Amazon that they are sending in a form to IRS for me to pay taxes on all books I've bought in 2012. Almost $200.. Just wondered if anyone else got that notice...They never give an option to pay tax when the purchase is being made. Linda

message 2: by Paul (new)

Paul | 341 comments Strange. Can't imagine why the IRS would be interested in sales tax -- your state, maybe, but not the Feds. Amazon does report income to the IRS if you're an author or other Amazon vendor, but they just started collecting sales tax for my state relatively recently. Maybe I'll get a similar notice for any portion I didn't get charged for last year.

message 3: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments Paul wrote: "Strange. Can't imagine why the IRS would be interested in sales tax -- your state, maybe, but not the Feds. Amazon does report income to the IRS if you're an author or other Amazon vendor, but they..."
TN does not have state tax so this is within IRS. Also, I've never sold anything on Amazon. I didn't even spend that much last year.

message 4: by Paul (new)

Paul | 341 comments Guess I'd better check my mailbox. Good luck.

message 5: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments Paul wrote: "Guess I'd better check my mailbox. Good luck."

I don't know why they are checking out TN so much, but I will find out & keep all posted on what I learn.

message 6: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments Paul wrote: "Strange. Can't imagine why the IRS would be interested in sales tax -- your state, maybe, but not the Feds. Amazon does report income to the IRS if you're an author or other Amazon vendor, but they..."

Forgot to say that IRS is checking into EBAy also. I heard that a few months ago on tv.

message 7: by John, Moderator in Memory (last edited Mar 13, 2013 01:44PM) (new)

John | 834 comments Mod
Here is a silly question: Are they only reporting the purchase of books to the IRS, or are they reporting all of the purchases we have made through Amazon.com? I haven't really spent a lot on books in 2012, but I have bought a ton of other stuff. This would really suck because I would have to redo my tax returns.

message 8: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments John wrote: "Here is a silly question: Are they only reporting the purchase of books to the IRS, or are they reporting all of the purchases we have made through Amazon.com? I haven't really spent a lot on boo..."

I will ask about that when I talk to them & let you know. Right now, I'm just waiting for their phone call. Also, the only thing I've bought on Amazon are books. What really gets to me is that it was not any money to speak of! Just a very small amount, so I'm just worried about others like yourself that have spent a lot on Amazon. I know one person spent over $5000. Wow, that would be bad.

message 9: by Tej (last edited Mar 13, 2013 03:20PM) (new)

Tej (theycallmemrglass) | 1725 comments Mod
Be careful Linda, it could be a fake email, does it address you directly by name or as "dear customer"?

message 10: by Vickie (new)

Vickie | 63 comments Linda, I hope you went online and got a legitimate phone number for Amazon customer service and didn't call a number given in the e-mail. The whole thing sounds fishy to me.

message 11: by Randy (new)

Randy Harmelink | 1097 comments On another topic, I noted a help topic on Amazon that indicated notices were only being sent to residents of North Carolina and Tennessee:


message 12: by Paul (new)

Paul | 341 comments Ahh-HAH! Good work, Randy. So this does look like a state deal, rather than federal. In California, Amazon apparently expected people to notify the state voluntarily, on their own, about any Amazon purchases, though I can't imagine many did. Most didn't even know about it at the time. But now they collect tax on CA sales.

message 13: by Randy (new)

Randy Harmelink | 1097 comments Another Amazon help page that lists which states they are now collecting sales taxes for:


message 14: by Steve (new)

Steve | 6 comments Everything I've heard about the IRS is that the Never contact people by email. So, if they seem to have sent you an email, it's a scam. Whatever you do, don't give them your Social Security number.

message 15: by Tej (last edited Mar 14, 2013 04:07PM) (new)

Tej (theycallmemrglass) | 1725 comments Mod
Merging thread: 4 posts moved to this this thread below (including mine!):

Message by Linda
Linda D:. I finally talked to Amazon & found out more details. Remember, TN. does NOT have state tax that is reported each year as some states do. Amazon said, " anyone that bought anything that was listed as "refurbished or open box items, or DIGITAL (books, movies?)" from Warehouse sales will be notified regarding tax. These items are always bought through Warehouse Deals (a part of Amazon), but they can also be under other names. Such as -if you bought a refurbished tv, you would be required to state that on your 2012 IRS form & pay tax on it. I told them I had only bought books-how can that be thought of as "refurbished"? She said they would look over my account & email me. (Personally, I had never heard of "Warehouse Deals"). She said Warehouse Deals was a subsidiary of Amazon. She did send an email about this. Weird thing , it only includes South Carolina and TN. I ask if it concerned other states besides these 2 states & she said "YES" all states and it is to be reported to IRS. After reading the link she sent me it only spoke of these 2 states. This was a major contradiction. All I can advise others to do is to look at any emails from amazon, & for goodness don't buy anything refurbished, open box, or digital. OH, she also said all the forms have not gone out yet! I told her the deadline for filing was very close. she didn't comment on that. Here is the link that she sent to me,remember even though it only has 2 states listed, she said all states would receive this notice...??
http://www.amazon.com/gp/help/custome... Or you can go to Amazon "Use tax Notification". What is listed on that page is a direct contradiction of what she read to me. Hope this helps. Glad I never bought anything really expensive like a $3000. refurbished tv or a bunch of movies. Just remember the words "Warehouse Deals"...I also saw on the news that IRS was investigating EBay sales that were not charging tax, but that was several months ago & I didn't pay a lot of attention to it at the time. My husband was quick to remind me of that. If they dig into EBay, then I am in trouble! As of now, even though the statement on the link on Amazon says "should not be used for federal income tax", but then she read another statement to me that I did need to report it. Like I said, what she read & what is on the actual amazon page contradicts itself. BetterWorld Books is a charity organization & if you SEARCH, you can find the books, (digital & paper) new & used close to the same price of Amazon because shipping is FREE because it's a charity.Hope this helps. And GOOD LUCK to everyone that's bought an expensive item, open box, refurbished. I received my email on Jan 25, 2013, but she said they are still being sent out now. I'm telling all this now because we are just now filing our tax return. Hope this info is useful.

message 2: by Tej
Gosh, I thought my UK inland Revenue sucked...!

Surely, the customer has a right to refuse since the customer is under the impression that the product is fully paid for including the tax. The retailer should be paying the tax as when the product is sold, transaction was complete. If they didnt charge the tax then that's their fault for not pricing their products properly, its their responsibility to pay the tax. If the customer is unaware that they have to pay more for a product they might not have bought the product in the first place.

I know I am not a US citizen but retailers accept the money and pay the tax collector, not the customer. That's my perception and certainly how it works here in UK. I imagine there will be a massive uproar.

There is also a big uproar here in UK regards to Amazon dodging Tax, also Google and Starbucks doing the same.

message 3: by Linda D.
Oh dear, your perception is wrong. They (Amazon in US) don't usually add tax (never have for me). Retailers never pay tax on a customer, they only pay tax on their profits. The stores simply add all the sales & give the totals of names, address of people they sold to in the past year to our government. So the government now has a list of money spent & how much tax is owed, plus the names. That way they can just cross reference our returns (what we claim) against their records, then when/if they catch anyone in a lie, you get audited. that is very bad for anyone. They are now starting this on EBay.

message 4: by Tej
Oh wow, is that how it works. Thanks for the insight, Linda. I have visited America several times and I do recall that I have to mentally add the state tax to whatever items on the shelves but ultimately I am still giving the shopkeeper the tax. I didnt realise the full tax system there.

So every single citizen have to fill tax returns? I also have to fill tax returns but that's because I am self employed!

message 16: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments John wrote: "Here is a silly question: Are they only reporting the purchase of books to the IRS, or are they reporting all of the purchases we have made through Amazon.com? I haven't really spent a lot on boo..."

Oh Goodness, This is what is being reported: refurbished items, open-boxed items, anything digital, electronics and anything from WAREHOUSE DEALS. (which I've never heard of but they are a subsidiary of Amazon. If I were you I just go through past emails from Amazon & let them contact YOU, & not draw attention to yourself. Did you read the last large post on everything I learned? It's lengthy, but clearly shows that Amazon is doing this for a first time- what the woman READ to me contradicts what is posted on the Amazon site.

message 17: by Linda B.D. (new)

Linda B.D. (lindabd) | 85 comments I'm just ticked that there was no previous notice about this in 2012, as they clearly knew what they were going to do. But then, it may have effected sales...

message 18: by Vickie (new)

Vickie | 63 comments For those of you who might have had a difficult time following some of this information, here is some additional clarification that might help.

Most (all?) states imposes a use tax on items that are purchased by state residents/brought into the state to be used in that state without the purchaser having paid sales tax in that state. For example, you have to pay use tax on anything you buy via the internet, phone, or from mail-order catalogs if you did not pay state sales tax on it when you bought it. In most states, you're supposed to keep track and report it yourself.

But, as a result of various lawsuits, Amazon is now required to report those purchases in some states. I would emphasize that your responsibility for declaring your purchases and paying these taxes this is nothing new. You have always been required to report this to your state department of revenue. (My tax guy asks me about my internet purchases every year when he does my taxes.) The only thing new is that Amazon is now required, in TN and SC, to send you a summary of things you have purchased, in order to help you do something that, of course, as good law abiding citizens, you have already been doing on your own for years (wink wink).

Linda, it sounds like the person you talked to at Amazon didn't really understand this at all. I actually did know about it because I've kind of been following the various law suits. But, I was confused when you said in your first post that Amazon was sending a form to the IRS, which I interpreted a meaning that they were sending something to the Internal Revenue Service - that federal bureaucracy to which you pay your income tax. It wasn't until I looked at the Amazon customer service page that I figured it out.

message 19: by Vickie (new)

Vickie | 63 comments Tej, what Linda told you isn't entirely accurate. Here in the US we do not have a national retail sales tax nor do we have a VAT tax (yet). The only types of tax we routinely pay on purchases are state and local sales taxes. Retailers collect that sales tax from the purchaser at the time of purchase and forward that money to the state/local government revenue department.

However, companies that do not have a physical presence inside a state have, historically, not collected sales tax on purchases sent to those states. So, for example, if I order some clothes from L.L. Bean, a major retailer in Maine, L.L. Bean doesn't charge me any state sales tax because I don't live in Maine. If I did live in Maine, then they would charge me Maine state sales tax. Purchasers have always been supposed to voluntarily report and pay sales tax in their own state on those purchases but people typically did not do so. Until the explosion of online retailers, states mostly turned a blind eye because until internet days, it didn't amount to that much lost revenue. Now, however, states are waking up and realizing that they are missing out on a lot of uncollected sales tax revenue because people don't report their purchases and there is quite a bit of legal and legislative wrangling going on over the whole business.

message 20: by Randy (new)

Randy Harmelink | 1097 comments ...and one reason businesses weren't required to collect the sales taxes on things like Internet purchases is that it might require them to file sales tax paperwork to each of the 50 different states. That would be too much of a burden for most small companies.

message 21: by Vickie (new)

Vickie | 63 comments Amen to that, Randy. I know from personal experience that simply keeping up with the sales tax paperwork for a small business to a single state is a pain in the neck. I can't imagine having to do it 50 times over.

message 22: by Linda B.D. (last edited Mar 14, 2013 09:05PM) (new)

Linda B.D. (lindabd) | 85 comments Ok, don't beat me up... I sure do not know everything nor do I try. I did want people to realize that there are notices going out-that's all.I usually buy my books at a local store. Just a very few- like 5 from Amazon! Not even $35.00 worth. That's why it seemed so ridiculous for me to get that notice. I thought it had to be over a certain amount to report. I can't imagine if they sent every person in TN a notice because they spent $5.00 or $10.00. All I know is from now on I will only buy from BetterWorld Books because they DO take out tax and it's a charity...I've never done anything close to being illegal. Maybe I should call my brother that's a CPA in Memphis & find out if there is a limit & the fine details.

message 23: by Vickie (new)

Vickie | 63 comments Linda, I wasn't trying to beat you up. It's a complicated subject and the person who tried to explain it to you at Amazon customer service clearly didn't understand it, either. The only reason I understand any of it is because I've been following it. I was just trying to clarify things. I'm sorry if you felt I was attacking you.

As for breaking the law, most of us have been breaking it for years. These laws aren't new. And yes, sending notices to everyone in TN and SC who ever bought anything through Amazon does seem silly, but since when has "it has to make sense" been a requirement for government/legal action? As for a spending limit below which you don't have to report, as far as I know, there isn't one in my state, but I figure it's kind of like exceeding the speed limit - sure, going 58 in a 55 mph zone is technically breaking the law, but realistically, it's pretty unlikely that any LEO is going to pull you over for it.

message 24: by Tej (last edited Mar 15, 2013 11:21AM) (new)

Tej (theycallmemrglass) | 1725 comments Mod
Thanks for further clarification Vickie and thanks Linda for raising the whole issue for everyone in the US with your thorough posts.

Randy wrote: "...and one reason businesses weren't required to collect the sales taxes on things like Internet purchases is that it might require them to file sales tax paperwork to each of the 50 different stat..."

In UK, all retailers collect tax, whether in shop or online. Its part of the bookkeeper's job (or accounts dept). Its not a big hassle at all as the accounting software such as Sage or small businesses simply calculates the tax (VAT) from the sales. Its just a different set of calculations. Every invoice or receipt includes the VAT. The reason its so simpler over here I think is because our tax rate is uniform across the country (20%!). Whereas in US I recall it differs from state to state.

message 25: by E.B. (new)

E.B. Brown (ebbrown) | 320 comments Oy vey. This makes my head hurt.

message 26: by Tej (last edited Mar 17, 2013 06:45PM) (new)

Tej (theycallmemrglass) | 1725 comments Mod
E.B. wrote: "Oy vey. This makes my head hurt."

lol. I used to be an assistant accountant believe it or not. I had to get out fast, was boring me to death! I preferred my previous Uni job making burgers at Burger King, much more fun!

message 27: by Paul (new)

Paul (paullev) | 791 comments In more recent news, I saw a brief report the other day that the Senate had passed a bill which would help implement sales tax on most online purchases. The House was split, where Republicans themselves are split on this tax. Maybe the House Republicans will for once do something right and knock down this tax (which is regressive, as are all sales taxes on low-cost items). http://www.usatoday.com/story/news/po...

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