Under the Dome

January 28, 2014

Amazon’s decision to collect NC sales taxes could mean $20M to $30M for state

Amazon.com’s decision to collect sales tax in North Carolina could mean an additional $20 million to $30 million in revenue for the state, a legislative economist told lawmakers on Tuesday.

Amazon.com’s decision to collect sales tax in North Carolina could mean an additional $20 million to $30 million in revenue for the state, a legislative economist told lawmakers on Tuesday.

Barry Boardman with the state Fiscal Research Division said it could add up to $10 million to $13 million for city and county governments.

He said that the numbers were preliminary estimates and that the impact will be clearer by the end of next month, after the revenue begins rolling in Feb. 1. Boardman’s estimates were in response to a question from a legislator at the Joint Legislative Committee on Governmental Operations about the impact of the Amazon change.

Amazon said last week that it would begin collecting sales tax. Some retailers and public officials have complained for years that the online merchant has an unfair advantage over brick-and-mortar businesses because it hadn’t been paying sales tax.

Federal law doesn’t require online retailers to charge sales tax in states where they don’t have a store or some other physical operation. The company says it will be making an unspecified investment in North Carolina.

Boardman was at the committee to update legislators on state revenue, which he said is running $83.5 million more than the $10 billion target through December. Personal income and sales taxes are the main drivers.

“We’re on track for that slow, steady growth pattern built into the forecast,” he said.

Sen. Bob Rucho, a Matthews Republican, pressed Boardman to acknowledge that the state’s jobless picture was improving, which GOP lawmakers contend is due to their actions over the past three years.

Boardman said employment has steadily increased over the past three to four years. He also said there are several factors to take into consideration, and as a result the unemployment rate can be difficult to assess.

Staff writer Craig Jarvis

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