Poll: Should We Have to Pay Amazon Sales Tax?

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—a state which desperately needs cash—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 L.A. 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.

RW Lee September 14, 2012 at 10:00 PM
The closing of the Ritz Camera store at the Shops at Mission Viejo Mall is an example of how tax free internet sales affect retail stores. People visit the store, take up the time of the retail salesperson, then go on-line and buy tax free. The sale should tax free both on -line and at the store or taxed at both. A level playing field.....you know riff.
KC September 16, 2012 at 02:04 AM
You're talking about amazoning, which sucks since it has turned every store into a showroom for online shopping. But even having to pay tax, it's not a level playing field for the simple reason that Amazon will always be able to do it cheaper since they have a lower overhead. A great example, I bought a gift once where the store was charging $600 for it while amazon was only charging $400, even if sales tax were a factor I would still win out with Amazon. Also, the main reason Ritz died out was that the tech had evolved to the point where their development services fell out of relevance, just like with Kodak.
RW Lee September 16, 2012 at 04:01 AM
Ritz was just a local example, all retail outlets have to add value to hold on.
KC September 16, 2012 at 04:33 AM
You still had a good example, old vs new. People who sell goods (as opposed to services) have no way to compete with Amazon for the simple reason that they are not only going against the online version of walmart (as in they can lower prices by buying in volume) but they are also going against anyone else who wants to sell the same good. In a physical store, the overhead is a massive sunk cost, you not only pay rent, but also utilities, staff to keep the store running, and other costs with no promise of selling a single thing. With Amazon, the normal operating overhead is almost obliterated (esp. if someone runs a company out of their home even if they are not zoned for it or paying for a permit). You don't need a retail space, power, etc. and you are open 24/7. If you use fufillment by amazon, you don't even need to lift a finger since Amazon becomes your staff and warehouse (they take a cut of the sale price). Honestly, even collecting the tax won't do much considering that their prices are still lower.
Joker Joe September 17, 2012 at 03:42 PM
To level the playing field we have to lower the retail stores taxes. Mission accomplished.


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