Executive Briefings

California Starts Collecting Taxes on Internet Sales

The days of most tax-free internet shopping in California are over. After years of controversy, the world's largest online retailer, Amazon.com Inc., has begun collecting state and local sales taxes on California purchases. Depending on where you live, sales taxes in the state range from 7.25 percent to 9.75 percent.

New state and local government revenues from Amazon alone are expected to be as high as $100m during the first year of collection, with the total for all internet sellers reaching $317m in the year that began July 1. Much more money is expected to flow into government coffers in coming years as e-shopping expands.

California consumers are divided on the internet sales tax issue. Many who have avoided taxes in the past rushed to make last-minute tax-free purchases. "Definitely stocking up ... can't beat 8 percent or 9 percent savings," tweeted Patrick Chen, who identified himself on Twitter as an internet game developer.

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New state and local government revenues from Amazon alone are expected to be as high as $100m during the first year of collection, with the total for all internet sellers reaching $317m in the year that began July 1. Much more money is expected to flow into government coffers in coming years as e-shopping expands.

California consumers are divided on the internet sales tax issue. Many who have avoided taxes in the past rushed to make last-minute tax-free purchases. "Definitely stocking up ... can't beat 8 percent or 9 percent savings," tweeted Patrick Chen, who identified himself on Twitter as an internet game developer.

Read Full Article