Amazon shoppers in D.C. and 22 states currently make their purchases without having sales taxes collected — a major point of contention for traditional retailers who consider the arrangement unfair.
Shortly the playing field will be evened in the District however as representatives for the online seller informed the D.C. tax office in recent weeks that it would begin collecting the 5.75 percent sales tax on purchases shipped to the District.
The company then issued a statement to WTOP Friday saying that, “Amazon will be required to collect sales tax in Washington, D.C. beginning on October 1.”
Company spokespeople repeatedly declined to respond when asked to elaborate, but Amazon is in search of locations to open brick-and-mortar stores in D.C. and opening one would trigger a law requiring that it collect taxes for online sales as well. Amazon chief executive Jeffrey P. Bezos owns The Washington Post.
“If Amazon opens a store they will be subject to District tax law, including the requirements regarding collection and remittance of sales tax, the same as any other retailer in the District,” said David Umansky, spokesman for D.C. Chief Financial Officer Jeffrey S. DeWitt “In addition, if Amazon opens a store in the District sales taxes would be applicable to all Amazon products delivered to the District. Vendors on Amazon selling products delivered in the District will be subject to the taxes applicable to them.”
States have varying rules for online sellers when it comes to tax collections and several have passed rules specifically targeting the Internet giant. Shoppers in Maryland and Virginia already pay the tax when they make their purchases.
The lack of a federal mandate requiring online sellers to collect the tax on all purchases has long irked owners of malls, shopping centers and other brick-and-mortar locations, but Amazon itself — infamous for upending book stores’ business model — is now becoming more of a physical bookseller itself.
Amazon already has three brick-and-mortar book stores, in Seattle, San Diego and Portland. It is hiring for a location outside of Boston. And it has enlisted the brokerage firm KLNB to scout places to open in D.C. Michael Pratt, principal at KLNB, declined to comment.
After opening the 7,400-square-foot Seattle location last year, the company said it used customer ratings, sales data and other information to curate the selection of books and offered the same price it did online.
Jodie W. McLean, chief executive of Edens, owner of dozens of shopping centers and developments, including Union Market in D.C. and the Mosaic District in Merrifield, said that she expected Amazon to accelerate its openings this year and next.
“They are going to roll out a series of stores over the next 18 to 24 months. They are 100 percent committed,” she said.
Sarah Halzack contributed.
Follow Jonathan O’Connell on Twitter: @oconnellpostbiz