I’m one of those! One of those what, you ask? I’m one of those, who shops a lot on-line, especially with Amazon!
You can imagine my discomfort with news that Amazon and other online retailers will begin collecting sales tax from the citizens of California tomorrow.
Of course this discomfort is generated by the realization the sales tax savings I avoided from on-line purchases, sometimes helped cover cost of shipping, which wasn’t always free. This saving will be going away!
However, when emotion was set aside in favor of reason, I hate admitting I understand the reason for this tax.
On-line businesses have enjoyed a distinct advantage over brick and mortar stores, because they have been able to skirt the sales tax in California.
It is not uncommon for consumers to visit the brick and mortar stores to have a hands-on experience with the product. They tap store employees and staff for their expertise. When the consumer walks out of the store empty handed to buy online, it becomes an issue.
It is projected the collected tax of on-line purchases could generate $80 to $100 million a year. For the cash strapped California budget, that is a significant number. It has been estimated that states across the country, lose approximately $11.5 billion in uncollected sales tax each year from on-line sales.
Amazon fought California at first over the collection of tax. However, they have now agreed. Other GREAT news about Amazon – It is estimated they will create approximately 1,000 jobs, when they build two large distribution centers in this state.
There is an excellent in-depth article presented by CBS News regarding these developments. It is titled, “California Law Ends Tax-Free Shopping for Amazon.com and Other Online Retailers.”
Seven states across the U.S. already collect sales tax via Amazon. Seven more states are slated to begin in the future.
Comments(20)