JACKSON – The fact that internet retail giant Amazon has purchased Whole Foods grocer could mean that a bill pending on the House calendar would generate less funds than expected for state and local road and bridge needs.
Mississippi Revenue Commissioner Herb Frierson said recently that because Amazon now owns Whole Foods, it is obligated by law to collect the 7-percent tax on its internet sales and remit those funds to the state of Mississippi.
Amazon, starting early last year, began voluntarily collecting the 7-percent tax on retail sales for the state. But later in 2017, Amazon announced the purchase of Whole Foods, a nationwide grocer that specializes in health food items and environmentally friendly products. Whole Foods has a location in Jackson.
Based on a U.S. Supreme Court ruling from the 1990s, retailers do not have to collect the sales tax/use tax for the state if they do not have a brick-and-mortar location in the state.
Frierson said the Whole Foods location in Jackson gives Amazon a brick-and-mortar location in the state, switching its tax from a use tax to a sales tax.
That is significant for legislation pending in the House. The bill would divert money from the state general fund to road and bridge repairs on the state and local level. It would send the amount of money collected from the 7 percent use tax collected voluntarily by online retailers that is between $50 million and $250 million.
If the behemoth Amazon is not one of the voluntary collectors of the use tax, it most likely would significantly diminish the size of the funds generated by the House legislation.
Kathy Waterbury, a spokeswoman for the state Department of Revenue, said between January and October of last year (the last figures she said she saw), $47.8 million was collected voluntarily for the state by online retailers. But those figures included collections by Amazon.
She said it is…