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Sales Tax for Amazon Purchases Begins in 2 Weeks

The online retailer will levy state tax on mail-order purchases beginning Sept. 15. Depending on where you live, that could add more than seven percent to the cost of each purchase.

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.

In a little less than two weeks—September 15 to be exact—Amazon will begin charging sales tax on purchases for California residents.

Up to now, buying online at Amazon.com saved customers money; 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 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 SF Chronicle. The Chronicle says that in June, it leased 83,000 square feet just south of San Francisco's Financial District.

And in Sunnyvale, according to the Chronicle, "Amazon is reportedly close to signing up for close to 600,000 square feet at the partially completed Moffett Towers complex to house its Lab 126 subsidiary, currently in Cupertino. The lab is where the Kindle and other "easy-to-use, highly integrated consumer products" (including an Amazon smartphone) are being developed."

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.

The Real Anon September 06, 2012 at 11:26 PM
Why did Amazon throw its largest customer base under the bus? I am mad as hell and I will not shop at Amazon any more just because of this. So they have lost the $1K+ I spend every year there.
Watzon McWats September 07, 2012 at 12:28 AM
It's not elitism to want to support your community. Working over there is one thing, shipping all your money over there is another. The big cities don't need the help like we do. Shopping over there once in a while is one thing, but plenty of folks I know do the bulk of their shopping in San Jose or online - they won't even give local places a chance because that's what their friends do, what their parents did, etc, etc. I totally understand wanting to save money. At times I'll spend a little more to support local businesses, but I don't expect others to do that. There are times however when you can support local businesses and break even, or even come out on top. Santa Cruzians swearing off Watsonville and Salinas makes no sense now that their crime rates are lower than SC. Big bad Watson and Salas are old news. Folks who do swear off those towns again, do so because that's what their parents did, or what their uninformed friends tell them to do. The reality is that those towns are no more dangerous than SC. Salinas has quite a bit of unique commerce, and up until big expansions in Capitola, Watsonville drew a lot of folks from north and mid county to Home Depot and Target.
Watzon McWats September 07, 2012 at 12:28 AM
Even then, if you just plain ol don't like Watsonville or Salinas, why not shop in Capitola, Marina, Monterey, or even Gilroy? Why not support fellow small towns? Baring commuter traffic or a PGA tournament, the drive from mid county to the Del Monte mall in Monterey takes about the same amount of time as it does drive to San Jose, and it's a much more enjoyable drive. On the way back, pickup some local produce in Moss Landing that's much fresher and much less expensive than what you'll find at a big supermarket. Again, shopping local really isn't all that hard if you just give it a chance. I look at the Monterey Bay as it's neighboring small towns as one large community - our own "bay area" if you will. If you can keep things within the community without any skin off your nose, I say go for it. San Jose has plenty of jobs and plenty of money, down here - not so much.
L.A. Chung September 07, 2012 at 06:26 AM
I'm another one who shops the mom and pop bookstores. I do shop Amazon when I'm in a pinch and it's late at night, but mostly as a convenience, and it's not often.
Bob M September 07, 2012 at 03:06 PM
I for one miss the old "Clean Well Lighted Place for Books" that was in the Oaks Shopping Center. It was a great book store and comfortable for my kids. The small book shops are few and far between these days. I use Amazon only when I cannot find the item locally (books, videos, etc) ,which unfortunately is becoming more common.

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