MEMPHIS, TN (abc24.com) - Love shopping on Amazon? Did you do a lot of it last year? If so, you may owe some back taxes. Many people in Tennessee are getting some unexpected news this week and they are not happy about it.
It’s all thanks to a new law that went into effect in March; the Tennessee Act 67-5-5 requires Amazon to notify customers that they may owe Tennessee's "use tax" from all the stuff they bought last year.
"Really? On Amazon? I didn't know that,” said Amazon shopper, Clinton Johnson.
“So we're going to get taxed for stuff we already bought? Um, that's annoying, that's crappy,” said another online shopper, Elise Chaffin.
If you don't pay the bill you will face penalties and fines. The Tennessee Department of Revenue says its collected use tax on anything bought out of the state since 1947 but it is based on an honor system.
"We encourage Tennessee's tax payers to voluntarily file the consumer usage tax form,” said the Tennessee Department of Revenue Director of Communications Billy Trout. “We will of course bill for the appropriate amount of taxes."
In April, the Department of Revenue collected nearly $571, 197 in consumer use tax but with the new law officials say the tax could generate $22.8 million for the state and $9.6 million for local governments in a year.
The use tax is 7 percent, the same rate as the sales tax. So if you bought $100 worth of stuff on Amazon.com, you owe the state of Tennessee $7.
"The honest thing to do is obviously go pay it but I think a lot people probably won't,” said Chaffin.
"It's kind of like a set up because if you forget to pay or you don't know about this, I just recently purchased some things on Amazon, I didn't know. Now I need to go check and see if the IRS is on my tail but that's bad, that's real bad,” said Johnson.
According to Amazon's policy, it's not required to collect sales or use taxes in Tennessee, just notify customers that they may owe taxes.
If you need more information on how to pay and how much you owe, go to the Tennessee Department of Revenue website at http://tn.gov/revenue/