Hide Transcript Show Transcript

WEBVTT Amazon is the largest American online retailer - that is why a one sentence statement from Amazon sent to KCCI today will cause quite a ripple across the state... "Amazon will be required to collect sales tax in Iowa beginning on January 1, 2017." That means this 4K Ultra HD LE flat screen on Amazon dot com will cost 60 dollars more January 1st with Iowa's 6 percent sales tax factored in. Lori wermers - ankeny - amazon shopper - 37:11-"i guess it makes sense since you are making a purchase but it might limit my shopping online..." Many online shoppers aren't excited about paying more - but all those Amazon purchases by Iowans wil add up to a lot of sales tax revenue for the state ...a spokeswoman for the Iowa Department of Revenue says if sales on all online and catalogue purchases in Iowa were required to pay sales tax... Victoria daniels- IA Dept of Revenue - 7:55- "we estimate anywhere in the range of 18 to 24 million dollars in sales ta would come in, and that's conservative." So why does Amazon say they will be REQUIRED to collect state sales tax? Well, Amazon isn't saying...yet. Victoria - 12:22-"it could be that they like a number of retailers just recognize tha it's the right thing to do." It could also mean they are planning on building in the state ...which would trigger state law requiring retailers with a physical presence to collect state taxes on sales... Randy Traviss - co-owner, Traviss Audio Video - 25:27-"i think it's long overdue frankly..." Traviss Audio Video has been selling home electronics in Des Moines since 1949... co-owner Randy Traviss says he's excited to learn the playing field will be leveled in the eyes of customers. Randy - 25:49- "even if i'm selling a product for the same price, often times they'll say well i don't have to pay sales tax, so that's something that to us in retail has always seemed unfair ..."

Advertisement Online retail giant Amazon to charge sales tax in Iowa Share Shares Copy Link Copy

Online retailer giant Amazon announced Friday afternoon it would no longer be tax-free for Iowans starting Jan. 1. An Amazon spokeswoman told KCCI in a brief statement that "Amazon will be required to collect sales tax in Iowa beginning on Jan. 1, 2017," making Iowa the 31st state in which orders made on amazon.com will include a sales tax. Neighboring state South Dakota has already passed a law that requires businesses to collect sales tax after making a certain amount. And part of the online lure for shoppers is knowing they don't have to pay state sales tax, but when the "discount" disappears, it could mean smaller businesses benefit as shoppers flock to brick-and-mortar, small-town retailers, said Victoria Daniels with the Iowa Department of Revenue. "(Businesses) are losing sales to companies that aren't even here," Daniels said. When the change goes into effect at the start of the new year, a 4K Ultra HD LED flatscreen television on Amazon.com will cost $60 more when Iowa's 6 percent sale tax is factored in. "I guess it makes sense since you are making a purchase, but it might limit my shopping online," said Lori Wermers, of Ankeny. As more online consumers make bigger purchases through the site, they aren't particularly excited about paying more. But the purchases will mean a bump in a general fund revenue from the increase sales tax revenue. "We estimate anywhere in the range of $18 million to $24 million in sales tax would come in, and that's conservative," Daniels said. Amazon has not yet clarified whether or not it will be required to collect state sales tax. "It could be that they, like a number of retailers, just recognize that it's the right thing to do," Daniels said. Last year, there were $2.6 billion in tax sales in the state of Iowa, and online sales are growing at a rapid rate. But the change could also mean company officials are planning to build a warehouse in the area, which would trigger state law requiring retailers with a physical presence to collect state taxes on sales. "I think it's long overdue, frankly," said Randy Traviss, co-owner of Traviss Audio Video, which has been selling home electronics in Des Moines since 1949. He said he's excited to learn that the playing field will be leveled in the eyes of customers. "Even if I'm selling a product for the same price, often times they'll say, 'Well, I don't have to pay sales tax,' so that's something that, to us in retail, has always seemed unfair."