Sales tax on "agency model" e-books at Amazon

[NogDog]

It appears that the so-called "agency model" being used by several of the major publishers has another downside beside allowing them to sell their books at whatever retail price they choose without Amazon being able to discount them: you most likely are paying sales tax on them now, too. See this Amazon.com help page for details, in particular this footnote:

Kindle books sold by various publishers are subject to sales tax based on the publisher’s state tax reporting obligations and the taxability of digital books in those states. As a result, sales tax for Kindle books sold by the publisher may differ from the sales tax to which you’ve been accustomed for Kindle books.

[kindlekitten]

I thought it depended on the purchaser's state!?

[NogDog]

Originally Posted by kindlekitten

I thought it depended on the purchaser's state!?

It's all beyond the understanding of anyone without a degree in commercial law, and it depends on the specific laws in each state. As I understand it, in general, if the seller has any sort of "physical" presence in a state, then anything it sells to a consumer in that state must have sales tax applied. Apparently the major publishers have some sort of presence (or legally need to claim such or whatever -- beats me), so they charge sales tax in all or at least the vast majority of the states. In the case of this "agency model" stuff, the publisher is the retailer and Amazon is just the "agent" supplying the connection between consumer and seller.

On top of that, with most states (if not all), when you purchase something by catalog or on-line and do not pay sales tax for it, then you are supposed to be reporting it and paying it on your local tax returns. Of course, most everybody ignores that (or is not even aware of it, though I think with some big-ticket items like autos, they have to be reported to your state if you buy it out-of-state where you are not charged any local sales tax.)

[AnemicOak]

Yeah, this was discussed in another thread. There are actually over 10,000 distinct sales tax districts in the US (some counties and cities have sales tax on top of state sales tax).

Amazon appears to be actually charging tax like they're supposed to, but some of the retailers are charging everyone, or adding a percentage to the books price regardless of the percentage they're actually supposed to charge.