Online retailing giant Amazon.com will begin complying with a new Georgia law requiring the company to collect sales tax for purchases made in the state. Readers may remember last year when the state legislature passed the law altering the definition of a "physical presence" in the state. 

Online retailers often do not charge sales tax in states where they have no offices or warehouses because many states do not require out-of-state companies to charge sales taxes there. These laws are relatively old and not particularly well-suited for the internet era, where a company can locate itself anywhere but do business everywhere. As a result, some states like Georgia are updating their laws. 

Proponents of the change say that this will make competition fair between brick and mortar stores and online retailers. Others who support the law say that it will add about $16 million in revenue for the state. 

Any time a tax law changes, it is important to know how it impacts you and your business. Although there is often a delay between when the law is passed and when it goes into effect, individuals and businesses generally have to start working right away to make sure they are in compliance when the law goes into effect. If one is not following the new law carefully, they could face penalties and fees from the state revenue department or even the federal government. In some severe cases when a company does not comply with tax laws they could wind up subject to an audit and more extensive penalties if intentional omissions are discovered. 

Source: Atlanta Journal-Constitution, "Amazon to start collecting sales tax in Georgia on Sept. 1," Arielle Kass, Aug. 9, 2013.