Sunday, September 16, 2012

Amazon Now Collecting Sales Tax For Most California Buyers

Californians can now expect to start paying sale tax on most of the items they buy from online shopping giant Starting Saturday Sept 15h at 12:01am, the world's biggest Internet retailer, began collecting sales taxes on all purchases made from California residents directly through Amazon.

The tax ranges from 7.25% to 9.75%, depending on your location in California and the rate imposed bu your specific county. For instance people within sections of Los Angeles county will pay the highest tax rate with 9.25 percent in Inglewood and 9.75 percent in Pico Rivera.

For some purchase this won't mean the end of the free tax ride. For now sales tax is only collected on Amazon purchases within California to products that were sold by Amazon itself. According to a minor loop-hole in the law, products listed as ”fulfilled by Amazon”, but shipped from a third party merchant aren’t included in this tax collection deal.

Representatives from the State Board of Equalization, which collects California sales taxes, told  CNET that California lawmakers are already working on way to track sellers that are trying to find way around the new law and that attempts to collect sales tax from third-party merchants that operate outside of California are under way.

Speaking out about the loophole, the State Board of Equalization representative said “You can assume we’ll have ways of finding out who’s holding stocks of goods in California. We have enforcement authority to obtain information in a variety of ways. We’ll be approaching them with respect to their tax obligations.” According to the chairman of the Board of Equalization, the agency will hire 35 new attorneys, auditors and tax collectors to support the new Internet sales tax initiative in addition to transitioning some of the current staff to investigate tax collection issues with Internet companies.

California is just the latest state to begin collecting taxes from Amazon purchases. Amazon already collects sales tax in Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas and Washington. Unless they can block the initiatives they will also start collecting sales tax on purchases in New Jersey and Virginia during 2013. Indiana, Nevada and Tennessee start during 2014 and South Carolina starts during 2016.

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