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.
this is why i continue to favor restaurants for downtown. restaurants will be here in ten years, traditional retail probably won't.
But state officials should also think about why some people try so hard to avoid the tax. If California had a lower sales tax, people would have less of an incentive to shop out of the state, and our local retailers would not have suffered so hard for so long from the internet sales.
when amazon achieves same-day shipping to coincide with its locker system (storage units at convenience stores and other local merchants where you can have items delivered), there will be almost no reason whatsoever to leave the house to purchase most commodity items. the tax issue was a deal-maker/breaker ten years ago when local merchants still had meaningful advantages over then-immature ecommerce systems. in five to ten years, most of these merchants will be gone. ask Borders.
It's no secret that the good jobs are "over the hill" & shopping too where you can still get clean plastic bags instead of having to bring with you soiled sacks from Trader Joe's. The FYI on business is you have to have something people want at the right price. If you don't you go bye, bye. McWats fails to mention the only cities over in Santa Cruz that are successful are Capitola and Scotts Valley. Santa Cruz people are fearful of Watsonville and Salinas. They are cities where locals don't want to shop. When I go to Twin Lakes Beach in Santa Cruz I bring bread to feed the ducks. When I go to downtown Santa Cruz I bring a roll of quarters to feed the panhandlers and drunks. All are interesting to watch. On sunny days I bring more of each.
You are correct - one thing is I doubt anyone in this thread commenting on "It's about time" puts their online purchases on their taxes. Just one more thing to try and make themselves feel superior to other. Might as well let us know you drive a Prius as well. I am happy to say I live in Watsonville and since Capitola opened their Target there is a significant drop in those coming to Watsonville to shop. Target is all we have, that and fruit stands since you can't have a dirty fruit stand soiling the roads of the elitists in Santa Cruz. People think that Amazon is the last online store. Paying for sales tax there just means going to somewhere else and buying your cheaper items there. It will not boost local economies for B&M stores. Plus with coupons and $ off + free shipping it is still cheaper than Target, Toysrus, or other B&M stores that mark up prices. Comparison shopping will still happen with or without sales tax and we will still purchase items from places with the lower price. Bottom line is - I support local stores, but they can't meet every need.
If bricks and mortar businesses want to compete with Amazon they could try LOWERING THEIR PRICES.
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.