Free ride is over -- collecting California sales tax


SACRAMENTO -- Saturday is tax day for Internet shoppers in California., the world’s biggest Internet retailer, began collecting sales taxes on purchases made by Golden State shoppers beginning at 12:01 a.m.

The tax ranges from 7.25% to 9.75%, depending on where a buyer is located.

Chatter on Twitter on Saturday morning showed mixed consumer reaction.

“It was a good ride,” tweeted Christopher Ferebee, who identified himself as a literary agent and attorney in Southern California.

A tweet from Brasher’s Auctions, which sells cars at various locations in Northern California and the West, called Amazon’s agreement to collect sales tax “a sad day for Californians.”


Sure enough, a reporter’s quick Saturday morning shopping excursion confirmed that now is charging an estimated tax of $7.62 on a special offer of an $89.99 telephone answering system.

In an explanation of its “sales tax requirements,” Amazon noted that products it or its subsidiaries sell online are subject to collection of the sales tax in California as well as Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas and Washington.

Sales taxes may or may not be collected on goods sold through the Amazon website by other independent sellers, depending on each seller’s particular tax obligation to California or other states, Amazon said.

New tax revenue to California and local governments, generated just by Amazon, are expected to be as high as $100 million during the first year, California tax officials said. The total from all Internet sellers could reach $317 million for the fiscal year that began July 1, they said. Much more money is expected to flow into government coffers in coming years as e-shopping expands.

Both Amazon and the state tax collector, who have been at loggerheads for years over the issue of Internet sales taxes, say they’re prepared for the change.

“The agency is ready,” said Jerome E. Horton, chairman of the Board of Equalization, which administers the sales tax. The agency plans to hire up to 35 new auditors, collectors, lawyers and other personnel over the next three years and will redirect to the Internet sales tax effort some of its 90 existing investigators on an “as-needed basis,” he said.


The agency’s staff should have a good sense of which of the hundreds of out-of-state Internet sellers should be collecting California sales taxes and how much money they should be sending to Sacramento, Horton said.

After fighting legislative efforts to force it to collect sales taxes, Amazon last year struck a deal with Gov. Jerry Brown. The company promised to open two 1-million-square-foot distribution centers in Northern and Southern California and to start charging sales tax as of Saturday.
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