New Mexicans shopping on Amazon.com will soon find a state tax added on their bill.
State officials said Monday the online retailer will begin collecting gross receipts tax on purchases shipped to the Land of Enchantment in April, a move that may not thrill shoppers but will likely hearten legislators looking to boost revenue amid an ongoing budget crisis and please small businesses frustrated with competing against internet companies that do not charge New Mexico taxes.
“It will give much needed revenue to the state and it will allow local retailers to compete fairly,” said Simon Brackley, president of the Santa Fe Chamber of Commerce.
Internet retailers generally have not had to collect tax for states in which they do not have a physical presence, such as a warehouse or office.
So while a shopper at a supermarket or bookstore in Santa Fe is charged a gross receipts tax of 8.3 percent, a Santa Fean buying the very same merchandise from Amazon is not.
Legislators are mulling a law that would require major internet retailers to charge gross receipts tax on purchases shipped into the state. The proposal has met with bipartisan support and would place New Mexico among a growing number of states seeking tax revenue from the stream of online sales that has consumed a large share of the American retail market.
“The revenues generated by Amazon’s collections will be significant, likely in the tens of millions,” said Ben Cloutier, a spokesman for the New Mexico Taxation and Revenue Department.
That Amazon will charge the tax without the law in place follows a pattern of the company adopting state tax rates independently.
The company already charges sales tax in 41 states the District of Columbia.
The Santa Fe New Mexican is a sister-paper of The Taos News.