California residents stocking up at Amazon ahead of sales tax deadline

[Shawn Knight]

Amazon will begin collecting sales tax on purchases made by residents of California in just over a week, prompting many tech-savvy buyers to stock up on household goods and pull the trigger on big-ticket purchases like notebook computers and cameras. Sales tax in The Golden State ranges from 7.25 percent to 9.75 percent depending on where people call home, equating to significant savings for those planning to spend big ahead of the September 15 deadline.

Abdel Ibrahim, a tech entrepreneur living in San Diego, told the LA Times he was planning on buying a MacBook Air and MacBook Pro with Retina display before the 15th rolls around. He expects to save roughly $270 in sales taxes that he would otherwise have to pay if he bought the notebooks locally or after the deadline.

It’s not just the big-ticket items that are leaving Amazon’s warehouses early. 32-year-old Chris Cheng said he purchased nine items from Amazon in the past two weeks, including five pounds of protein powder, exercise resistance bands and a camera. That’s all in addition to the 40 hand warmers he also ordered.

Amazon isn’t the only retailer that will be affected by the new tax laws as some 200 other businesses will also be required to collect California sales tax. But because they are by far the largest online retailer, they’ve garnered the most media attention thus far.

The online retail giant has been fighting to prevent the collection of sales tax in California for some time now. They were granted a one-year extension last year but it appears their time has run out. Of course, the new requirement will be met with mixed feelings depending on who you ask.

It’s a win for smaller mom-and-pop shops as well as large national chains like Walmart and Target that have complained about Amazon’s “unfair tax advantage” for years.

"Every retailer has the ability to match a price, but no brick-and-mortar retailer can say to a consumer, 'Don't worry, I won't collect that sales tax,'" said Jason Brewer, a spokesman at the Retail Industry Leaders Assn. "That 6 to 10% price advantage is a huge problem and distorts the free market."

Amazon spokesperson Scott Stanzel said the company isn’t worried about losing any business as they still remain strong in regions that have required them to collect sales tax for some time now.

The change is estimated to bring the state $317 million annually with more than $83 million of that coming directly from Amazon.

Permalink to story.

https://www.techspot.com/news/50065-california-residents-stocking-up-at-amazon-ahead-of-sales-tax-deadline.html

 

[Littleczr]

How about we don't tax amazon and the mom and pop shops but we tax Walwart for evil business practices.

 

[Greg S]

Sounds good to me. Actually everyone in the US is supposed to report internet purchases and pay taxes on them, but nobody really does that.

 

[Tygerstrike]

How about the pricing on the internet. A simple AUX cable can cost from $9.99 to $15.99 in a brick store where online it can be purchased for .99. Ppl wonder why the economy isnt picking up fast enough. Theres your answer. Sure buy from the internet. But dont be surprised when half the shops in your town close up. Its because the consumer would rather have a deal now, then support their local businesses.
So yea, I certainly hope ppl have to pay taxes online, maybe will we see some trickle down to ACTUAL businesses. Maybe ppl will choose to support their local economy instead of sending that money out to other countries.

 

[Sarcasm]

Looks like I'm going to be doing less shopping on Amazon now. Oh well.

 

[Tedster]

Sounds like a bunch of liberals posting here that don't understand taxing business ruins jobs, the economy, and the consumer. Don't complain when your business pulls up anchor and moves elsewhere because you wanted to "punish the rich guy" or the "evil buisness" that brought you a service or product that you liked. Don't complain either when that very same business either drops you as an employee or lets go of a sub-contractor that employs you for the very same reason. Don't complain when the product you want is either unavailable or outrageously expensive because the retailer has to add taxes and cost in order to make a profit. Simple economics. (something not really taught in schools anymore,)

 

[Tygerstrike]

@Ted
If it was only as easy as you make it sound. The pricing of products on the Internet has been slowly destroying the brick and mortar stores for almost 10yrs now. The differences in taxes on the internet vs brick stores is minimal. A 5$ cable online will only add at most an extra 10% in taxes. Where the brick and mortar stores have to price products so the store makes money.Thereby causing you to pay more in taxes. If ppl want the economy to pick up, they need to stop being such cheapskates and go out and support the local businesses in their area. Stop buying it online....havent you ppl learned yet, its the same cheapo crap they sell at WallyWorld. You get to falsely feel better about yourself because you think your getting a deal. When the reality is that you will more then likely have to buy 3 more off the web.

 

[Scavengers]

Looks like I'm going to be doing less shopping on Amazon now. Oh well.

Why? You will pay taxes on it anyway and you will probably get a cheaper base price on Amazon.

Dave

 

[MilwaukeeMike]

Ted's right though.. .taxes hurt jobs. America already has the highest corporate tax rate in the world at 35%. Canada pays 15%. They said it's unfair that Amazon doens't have to pay tax, well how about making it so the 'mom 'n pop' shops don't have to pay tax either! California needs all the help they can get though... they've had 3 cities go bankrupt already. They're taking it from both ends. Tax revenue is down because of property values being low, and entitlements/pensions are going up as the population ages. Becaues California is liberal, they're going to raise taxes before cutting spending, but then companies like Apple set up an office in Nevada to get around all those taxes. So I guess they gotta stick it to the little guy and hit up the sales tax.

And Tyger is right too... why buy at a store when online is so cheap? Luckily it doesn't apply to everything, only commodity type stuff like wires and CD burners. You can't buy a blu-ray online much cheaper than walmart, and games and movies are the same price.

 

[Scavengers]

Slightly higher taxes in the 80's and also the mid to late 90's sure as hell didnt hurt jobs.
And the so called "job creators" have been turning some of the highest profits in history since 2002 and that has cretainly not helped with new jobs so please dont even go in that direction.

Dave

 

[Tygerstrike]

@Mike
Youre correct sir, the lower prices on the web are on select items. However as a person who runs a retail store, I hear this WAY to much. I can get it online cheaper. Normally they cant get an item cheaper when you factor in shipping. The mindset is what is disturbing. Ppl come in a complain about prices, demand that we sell it at what they sell it on the internet for, then give nothing but attitude when you explain that no brick store will match another competitors online price. I can understand trying to get the best bang for your buck, but its stupid to expect that level of pricing in the real world.
Im happy to see that Amazon has to pay taxes. It makes it fair for everyone out there who owns/runs a business. I know it kinda levels the playing field. Now Amazon either has to drop their prices to keep that level of sales, or lose business thereby giving those of a chance.

 

[MilwaukeeMike]

Slightly higher taxes in the 80's and also the mid to late 90's sure as hell didnt hurt jobs.
And the so called "job creators" have been turning some of the highest profits in history since 2002 and that has cretainly not helped with new jobs so please dont even go in that direction.

Dave

Those 'job creators' have no idea what Obamacare is going to do to their cash flow in the next couple years. Would you make the investment of new employees when you don't even know what they're going to cost you? The high cost of labor (current and past) is what drove the auto industry under. I don't know who you think has been making 'record profits' but in the last few years, Circuit City is gone, Borders Books is gone, United Airlines declared bankruptcy and a college grad with a finance degree has a harder time finding a job than a home builder.
Luckily welfare pays well enough that people can afford iPhones, so Apple has record profits.

 

[Scavengers]

Those 'job creators' have no idea what Obamacare is going to do to their cash flow in the next couple years. Would you make the investment of new employees when you don't even know what they're going to cost you? The high cost of labor (current and past) is what drove the auto industry under. I don't know who you think has been making 'record profits' but in the last few years, Circuit City is gone, Borders Books is gone, United Airlines declared bankruptcy and a college grad with a finance degree has a harder time finding a job than a home builder.
Luckily welfare pays well enough that people can afford iPhones, so Apple has record profits.

All you have to do is read Fortune. They aren't exactly trying to hide it.

Papa Johns already stated that it would cost something like 12 cents a pizza. It is nowhere near as expensive as some would want you to believe and no guess work is needed as it is readily available to read for those that want to change their tactics and try using facts for a change.
As far as the last line of your post, I agree. I would never claim that there isn't anything that needs cleaned up Mike.

Dave

 

[Novulux]

No sales tax was the reason I would buy components from Amazon rather than from Microcenter, Fry's, or Newegg.
Unless they have some awesome deals or are the only supplier with stock, I will take my business elsewhere.

 

[Fbarnett]

This is about sales tax. A business makes no profit from sales tax unless they are stealing it.

Making reference to corporate taxes is kinda silly also. The Smart ones dont pay anything that is why our debt as a nation is so high.. They spend millions with lawyers and accountants to make sure they dont.
I dont really read stupid comments all the way but making reference to Obamacare is kinda stupid. This is a law that California passed not Obama. Kinda silly to think that it really matters who the president is. Who ever it is is not gonna put anymore money in our pockets with the shape the country is in.

 

[cliffordcooley]

So yea, I certainly hope ppl have to pay taxes online, maybe will we see some trickle down to ACTUAL businesses. Maybe ppl will choose to support their local economy instead of sending that money out to other countries.

Personally I don't care if they implement taxes or not but when I see a 2 year old item sitting on a shelf that cost more than a new item on-line, I'm going to purchase on-line. These small shops you refer too, will purchase from the same places on-line and then mark up the product for a small profit. I can understand them marking up a product for profit. When you can purchase a product for the same price they did, why pay them a markup price just to keep them in business?

 

[Sarcasm]

Why? You will pay taxes on it anyway and you will probably get a cheaper base price on Amazon.

Dave

Yeah true, like I said I will be doing "less" shopping but not completely avoid it. Amazon still has some great deals. But sometimes there are those few items that is the same price on Amazon, I'd rather just go to a local retailer and get it right away.

 

[Scavengers]

Yeah true, like I said I will be doing "less" shopping but not completely avoid it. Amazon still has some great deals. But sometimes there are those few items that is the same price on Amazon, I'd rather just go to a local retailer and get it right away.

Good point. There are also times when I just dont want to wait, even though I can get next day shipping for $4 if something is availabale locally and it isnt too much more I sometimes just get it around here.

Dave

 

[Guest]

The problem isn't the tax itself. Even if the Amazon tax generates $300 million+ in sales taxes(an estimate which seems wildly optimistic) it is the California politicians, bureaucrats, and unions wasting that tax revenue in countless and stupefying ways eg High-Speed Rail, that makes the Amazon tax completely worthless. California could charge a 100% sales tax and the problems of California(and other states) would NOT be solved at any level.

Californians have a moral problem.

They like social welfare state 'goodies' that politicians steal from others and then bribe them with but they don't like the high taxes(thus prop 13 and avoiding sales tax) that are needed to pay for those 'goodies'. If that weren't bad enough, Californians double down on their irresponsibility by voting Democrat because even though they don't like paying high taxes like most Republicans, Californians are socially liberal and like things like Illegal Aliens, Gays, and the Environment most of all which Republicans generally don't like as much. So in the end Californians end up voting Democrat despite the evidence that Democrats spend tax revenue in most irresponsible fashion.

So not only are Californian's cheap but they're stupid as well.

I won't support a thoroughly corrupt California state government so I won't shop Amazon post-9/15/12. Just a few more months and I'll be leaving California along with my business. See ya' you socialist *****s.

 

[Guest]

So uh, when's the court challenge?

California has NO right to ask out of state retailers to collect anything for it if they don't reside within its borders, period. "Long-arm" doctrine with regard to state law simply isn't constitutional and only exists because so far people are too lazy to challenge it.

 

[Guest]

Disgusting that we have to pay sales tax online. That was one of the best benefits of online shopping.

We pay 30-40% of our income to income taxes. Then pay another 10% of what's left every time we make a purchase. Something is very wrong with this. But we tolerate it, and just follow the herd.

 

[Jay Pfoutz]

I disagree. Most people usually pay 15-20% of income to taxes. May be a bit steep, but what can you do? We're also getting raked by high gas prices.

 

[mailpup]

I'm from California and I pay approximately what guest above stated and California is the state in question. Of course, income taxes are combined federal and state. State income tax in my bracket alone is 9.3%. Federal is 28%. Sales tax in Los Angeles County is 8.75%. It's all among the highest in the nation. I know there are a few places worse off than we are regarding taxes but that's not much consolation.

 

[Jay Pfoutz]

Eek! Sorry to hear that. Some do indeed have it worse. My bad!