A deal between Mississippi and online retail giant Amazon to voluntarily collect an internet sales tax won’t be available for public view, the Mississippi Department of Revenue said Tuesday.
The agency told Mississippi Watchdog that it wouldn’t release its agreement with Amazon due to confidentiality statutes.
The DOR will hold a meeting on Feb. 15 to detail its proposed rule that would force online retailers with in-state sales of $250,000 or more to collect the state’s 7 percent sales tax. Despite stating in its proposed rule that the DOR would collect the sales tax retroactively, the agency also said its request for a new rule didn’t require an economic impact statement.
Russell Latino, an attorney and the state director for pro-economic freedom group Americans for Prosperity, says there’s an ulterior motive on why Amazon agreed to voluntarily collect the state’s sales tax.
“I’m assuming that one of the biggest companies on the planet did not show up in our doorstep simply to help the Department of Revenue collect more taxes,” Latino said. “It would be interesting to see the terms of the deal, wouldn’t it?”
The online retail giant this year has agreed to voluntarily collect state sales tax in deals with Iowa, Louisiana, Missouri, Nebraska, Rhode Island, South Dakota, Vermont and Wyoming.
On the legislative side, an internet sales tax in Mississippi is getting closer to reality after a vote Monday in the Mississippi House.
The House approved a bill that mirrors that of the proposed DOR rule. The bill passed the chamber, which has a Republican supermajority, on a 69-46 vote. It now heads to the Senate.
Proponents of the bill say the DOR would only start collecting a tax from online retailers that’s already on the books — the “consumer use” tax on all out-of-state sales.
Passage of an internet sales tax, opponents say, could open the state to a lawsuit. Alabama and North Dakota are being sued by retailers over their internet sales taxes. According to the 1992 U.S. Supreme Court decision Quill Corp. v. North Dakota, retailers are required to have a physical presence, such as a warehouse or a store, in a state before they can levy sales taxes on them. This concept is known as the “physical nexus” rule.
Both the House bill and the DOR rule justify the tax by claiming a Mississippi e-commerce customer becomes the nexus of the transaction, thus eliminating the requirement that an online retailer have a physical presence in the state.