Friday, September 14, 2012

Amazon Starts Collecting Sales Taxes From Californians At Midnight

Online e-commerce giant Amazon.com will start collecting sales taxes from California residents at midnight today, as a result of a deal the firm made with the State of California last year. The move--which has been widely reported to have spurred a last minute buying binge from Californians--comes as a result of aggressive move by the legislature to recoup lost taxes from out-of-state e-commerce sales. California is just one of the states across the nation which has come to view Amazon as a potential untapped cash cow for their budget. Californians have actually been required to pay online sales taxes for years, by submitting "use tax" returns, but those requirements have been widely flouted by California residents. The California Franchise Tax Board had reported that less than 1 percent of California residents have been paying those use taxes, despite concerted efforts to intimidate residents to pay those taxes. Amazon negotiated a holdoff until tonight on collecting sales taxes by dangling the promise of establishing warehouse shipping centers in the state.