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The mystery of NM’s Amazon tax take

The amount that Amazon is paying the state in gross receipts taxes — and even the circumstances under which it agreed to do so — is a matter of mystery, but a legislative staffer has come up with a ballpark number.

The best guess appears to be that Amazon will pay $10 millon to $30 million a year to New Mexico in gross receipts taxes, said Jon Clark, chief economist of the state Legislative Finance Committee.

“Given the limited data available, it’s hard to estimate an accurate ballpark number,” Clark said.

An Amazon spokeswoman, when asked to provide a figure, said only, “We don’t have anything to share on this right now, but I will let you know if that changes.”

Nor would the state Taxation and Revenue Department disclose the amount of taxes or any agreement with Amazon about paying them. Spokesman Ben Cloutier cited state law requiring confidentiality of tax returns.

The department announced in April that it would begin collecting gross receipts taxes on Amazon’s New Mexico sales. New Mexico was among the last states in which the online giant agreed to start paying the taxes.

Seattle-based Amazon had for years avoided collecting taxes in states like New Mexico where it does not maintain a physical presence, something many argued gave it an unfair advantage over traditional retailers.

Other online retailers, such as Target and Walmart, have had to tax online purchases because they operate stores within the state.

However, there’s a loophole in Amazon’s tax payments. With the exception of Washington state, the company does not collect taxes on the millions of independent merchants, or marketplace sellers, who sell their products through the Amazon website.

Those sales make up an increasing share of Amazon’s retail business, with third-party merchants expected to account for roughly 70 percent of the estimated $340.71 billion of merchandise bought on Amazon last year, the Wall Street Journal reported.

For that reason, Clark said, Amazon’s gross receipts payments to New Mexico might be more toward the lower range of his $10 million to $30 million estimate.

Clark said the LFC based its estimate on Amazon’s national sales, apportioned on a per-capita basis. Staffers also accounted for “the differential in real disposable income,” because New Mexico is among the poorest states in the nation.

The issue of third party sales might be settled if the U.S. Supreme Court agrees to hear a case stemming from South Dakota’s efforts to tax online sales, said Max Behlke, with the National Conference of State Legislatures.

A high court ruling could overturn a previous decision requiring retailers have a physical presence before a state can collect sales taxes from them.

Such a ruling could mean “tens of millions of dollars for New Mexico,” Behlke said.