Amazon now charges sales tax on California purchases
Amazon.com Inc. began charging sales tax Saturday on orders made in California, following legislation pushing the popular online retailer to do so.
Along with other online companies, Amazon is now required to charge sales tax to California residents pursuant to the new law, following on the heels of recent debates regarding the even playing field of e-commerce.
Before the tax law went into effect, out-of-state online retailers were not required to charge tax on purchases made in California.
“Retailers are very handicapped by tax,” said Mark Yoon, owner of A&R Textbooks on Pico Boulevard. “These days, students are going to Amazon in the first place.”
Similarly, the Santa Monica College bookstore has felt the sting of online buying.
“We’ve lost a considerable amount of business to online retailers,” said David Dever, the store’s manager.
Dever also noted that he considers the new law “fair commerce,” and thinks that now, “people might consider the regular, local bookstore.”
However, the difference in price is not so large that Amazon is expected to be reeling.
“Buying a book off of Amazon versus buying a book at the store is still cheaper,” said Rocio Fernandez, a fourth-year SMC student. “For the most part, people will continue [buying from Amazon].”
Following suit, Joy Tucker, chairperson of the business department, said that consumers will likely continue to use online purchasing services.
“A lot of people shop at Amazon because of the convenience,” Tucker said. “I don’t think students will stop.”
Part of the deal struck between Amazon and state officials—which included postponing the advent of the added sales tax date by a year—was that Amazon will set up shop in California, opening two warehouses in Patterson and San Bernardino.
“That’s more money coming into the state,” said Tucker, adding that the new facilities would also create jobs.
California is not the first or the last state to be taxed by Amazon. Seven states including New York and Pennsylvania have already been taxed, and more states are expected to come under taxation in the next few years.
However, whether or not California will draw in extra revenue is difficult to predict. According to The Tax Foundation, a nonpartisan tax research group centered in Washington, D.C., states that have already adopted the “Amazon” tax have received no extra revenue.
Amazon spokesperson Scott Stanzel said that the new law should allow the company to “expand our investment and job creation in the state.”
Stanzel declined to comment when asked about Amazon sales, but stated that Amazon is “thriving” in the areas where tax is collected.
The company has built a reputation among customers for low prices and fast service.
For students like Fernandez, these reasons are enough to continue shopping with Amazon, even with the new taxes.
“I trust Amazon,” Fernandez said.