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Amazon emails East Tenn. customers about tax

12:51 AM, Apr 25, 2012   |    comments
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 PDF Document: Public Chapter 624
 PDF Document: Amazon Email

Some East Tennesseans who buy products from online retailer Amazon.com have been receiving emails saying they need to pay a little known state tax.

Customers who use Amazon.com will not have to pay a state sales tax until 2014. However, they do need to pay a consumer use tax. That tax, which is financially comparable to the Tennessee sales tax, is supposed to be placed on any product customers buy from Amazon.com.

Past Story: Amazon will collect sales tax in Tenn. 

The tax has been around since 1947. Billy Trout, a spokesperson with the Tennessee Department of Revenue, said the state is aware not everyone knows about the tax. However, he said it still expects people to pay it.

"No reason to panic," said Billy Trout, a spokesperson for the Tennessee Department of Revenue. "We certainly work with all taxpayers in all different tax types. Our goal is to only receive the correct amount of tax from each and every taxpayer in Tennessee. This methodology that is being used now is one more attempt to make sure that we collect the proper amount of tax.

More about the Consumer Use Tax 

Amazon.com was forced to notify its customers such a tax existed when the state signed into law Tennessee Code T.C.A. 67-6-5 (f)(3) March 23.

The email Amazon sent out to customers shows how much money they have spent on the retailers' products. With that information in hand, customers are then expected to file a consumer use tax return with the state.

Consumer Use Tax Form 

Those returns can be filed on a quarterly or monthly basis if a customer makes frequent purchases. If a customer owes the state back use taxes, they should file an annual report for 2011 now.

"We ask that they do so promptly so we can collect the proper amount of tax," Trout said.

Debbie Toomey received an email from Amazon about the tax earlier this week. She said at first she did not know what it was about.

"I didn't understand why they sent it to me," she said.

She bought more than $100 worth of items from Amazon.com in 2011. She said she thinks its unfair she has to go back and now pay that company even more.

"I think they should charge me when I make the purchase and not charge me a year later," Toomey said.

The fight over whether Amazon.com should charge customers a sales tax has been going on for some time within the Volunteer State.

Rick Terry owns Rick Terry Jewelry Designs in Knoxville and Lenoir City. His company has to charge a sales tax to customers. He told 10News all companies, including Amazon should do the same.

"I don't think it's fair," he said. "I think Amazon should be paying sales tax.

But, he said he is not sure if the consumer use tax will level the playing field Amazon.com competes on with local businesses.

"My thought is most people are not going to pay that," Terry said.

According to Trout, Amazon.com is the only company in the state of Tennessee that has to tell its customers to obey the consumer use tax. That is because it is the only company that fits the description of state Public Chapter 624.

Amazon.com is not forwarding personal information to the state of Tennessee nor is it alerting the state as to who has yet to pay the consumer use tax. Trout told 10News the state's enforcement efforts to make sure people pay the tax is ongoing as it collects information from various taxing agencies and sources about which residents are paying their taxes. He could not comment on whether people who were unaware the tax existed should worry about enforcement.

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