Online retailing heavyweight Amazon forgot to exempt nonprofits when it started collecting local sales taxes for online purchases. Some nonprofits have started receiving refunds as Amazon works out the kinks in its new system.
As of the new year, Amazon began charging local sales tax on purchases, which is set at 6 percent in Bethel. The state legislature has not yet considered any bill to regulate this tax, and Bethel City Manager Peter Williams says that there is still a lot of room for interpretation on implementing the tax, which is required after the U.S. Supreme Court’s decision on the “Wayfair” case last year.
“As far as what Amazon did we didn’t really have any control over, and it’s kinda funky because YK[HC] is a nonprofit that we don’t charge sales tax to,” Williams said. “And they got charged. And the school is another one.”
The Lower Kuskokwim School District confirms that it is in the process of getting refunds from Amazon. The Yukon-Kuskokwim Health Corporation could not yet confirm how it is responding. Williams says that the city has made a sales tax exemption form available online for those who qualify.
“So right now what’s going to happen, I think for the most part, is people are gonna start getting taxed, they’re going to come to the city and go, ‘hey, what’s this all about?’ And the city is gonna have to figure out if they’re a non-profit or not,” Williams said. “And if they’re due an exemption, either we end up reimbursing them, or they could send the form to Amazon or whoever it might be that is doing the taxing that would exempt them from it.”
Amazon was also contacted for this story but did not respond in time for this broadcast.