Nevada residents to pay tax on Amazon purchases effective Jan 1.

Nevadans will be spending more for the Amazon purchases. (Photo: Bloomberg)

Tax on Amazon purchases takes effect in 2014

LAS VEGAS — Nevada residents will now pay tax on Amazon purchases starting at the beginning of the year.

According to Gov. Sandoval, charging tax on Amazon purchases will bring in an additional $16 million in sales tax, however that projection is based upon consumer habits not changing.

It remains to be seen what effect the tax on Amazon purchases will have on Nevada consumers.

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Will their shopping habits change?

If Nevada consumers do not change their spending habits and continue to shop on Amazon or even locally since the prices might be competitive then the projections may be realized, however, if consumer habits change and Nevadans just start buying less then the full benefit might not be realized.

Nevada Senators claimed that local businesses were suffering because of Nevadans shopping at Amazon.

Although economic times are still challenging in Nevada, is it realistic to think that a person would not make a $40 purchase at a local store simply to save a little over $3 by purchasing on Amazon?

It doesn’t appear to be likely

Consumers purchase from Amazon because the overall price is oftentimes much lower than it is locally and it is very convenient to shop from one’s armchair.

The real reasoning behind the tax on Amazon purchases is simply to raise money the easy way for local government and it has nothing to do with local stores since they are not likely to see any benefit from it.

Some shoppers will simply continue to shop on Amazon and pay the newly implemented sales tax which benefits the government. That is really what the local leader are banking on.

There is another change connected with Amazon, though, that might affect consumer habits.

The tax on Amazon purchases goes hand-in-hand with another big change that has been made at Amazon.

The free super saver shipping threshold offered by Amazon has increased from $25 to $35.

Smaller purchases on Amazon will now be subject to shipping fees and sales tax so those two factors might change the shopping habits for some people in Nevada since it will be more expensive.

Those changes will not likely push consumers into going to brick and mortar stores for their purchases.

Instead, certain shoppers will simply shop less at Amazon since it is no longer as good of a value and not as convenient.

The only entity that benefits from this change is the local government.

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