Amazon.com Sales Tax Begins Saturday; Should We Have to Pay?

The online retailer will levy state tax on mail-order purchases beginning Sept. 15. Are you going on a shopping spree before then, or are you happy to see the change?

If you've got items sitting in your Amazon shopping cart that you've not yet purchased, you might want to consider moving into the checkout line.

Friday is the last day to buy from the online retailer tax-free: Amazon will begin charging sales tax on purchases for California residents this Saturday. Sales tax in the region varies, ranging from 7.25 percent in Roseville to 8.25 percent in Galt.

Up to now, buying online at Amazon.com saved customers money, since no sales tax was collected.

But state lawmakers in California reached an agreement last year with online retailers, including Amazon, who agreed to begin collecting a sales tax in September. Those sale tax funds will be returned to the state.

According to the LA Times, about half of the projected $316 million raised in the first full year–and put into state coffers–is expected to come from merchandise sold by Amazon.

The agreement between Amazon and California may not last long. The Orange County Register reports that the agreement between the two parties was primarily a compromise meant to get a year's reprieve in collecting the tax in exchange for promises to add jobs and distribution centers in California.

Increased prices for online purchases is welcome relief for brick-and-mortar stores, who feel the playing field for customers will be a bit more level.

CNNMoney says Amazon already charges sales tax in six states: Kansas, Kentucky, New York, North Dakota, Texas and Washington. Pennsylvania will join California in sales tax charges in September. New Jersey, Virginia, Indiana, Nevada, Tennessee and South Carolina are all expected to collect state sales taxes from online retailers within the next few years, adding millions to state accounts.

States estimate they lose $23 billion in annual sales taxes, some $11.5 billion of it from online purchases, according to the National Conference of State Legislatures.

Meanwhile, Seattle-based Amazon has been expanding its physical presence in California, according to the San Francisco Chronicle. The Chronicle says that in June, it leased 83,000 square feet just south of San Francisco's Financial District, and is close to signing a deal for 600,000 square feet in Sunnyvale.

Amazon is also expected to open two California fulfillment centers that will employ at least 1,000 workers each in San Bernardino and Patterson.

If you're interested in applying for those jobs, Amazon has set up a website to receive applications.

Do you think paying sales tax on Amazon.com is fair? Will it affect your shopping habits? Share your thoughts in the comments.

Barry Kruse September 14, 2012 at 03:46 PM
The shipping & handling charges on catalog/online sales used to make it a level playing field. Adding sales taxes on top of that will make mail order considerably less attractive. Notice that no one ever asserted this "use tax" nonsense in the pre-Amazon days. Whether it sends people back out to local brick & mortar stores is a bit questionable. Besides pricing, one of the main reasons people went online is that they could find things the local stores didn't carry. Notice also that no one ever explains the justification for the unceasing increases in the *percentage* of sales tax being charged. The state deserves a big part of the credit for driving people to online purchases in the first place, but you'll never get them to admit it.
bruce mallon September 14, 2012 at 04:57 PM
if we had the same tax structure when Ike was president and we had a super strong economy and a co-operative democratic and republican party system. now er need tax money other ways, fees and fines are going to increase as taxes on wealthy folks get chopped. I like to call it math.
bruce mallon September 14, 2012 at 05:02 PM
Our state needs cash to function. If we had the same tax structure when Ike was president with a super strong economy, we didn't need sales taxes. We also had a co-operative democratic and republican party system. Now we need tax money to find other ways, fees and fines are going to increase as taxes on wealthy folks get chopped. I like to call it math.


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