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Online Shopping Is About To Get A Little More Expensive in California

Aired 9/11/12 on KPBS News.

Big internet retailers like Amazon are making big moves that may affect your pocketbook.

Online shopping is about to get a little more expensive for Californians starting Sept. 15th.

That's when a new law goes into effect requiring large internet retailers, like Amazon, to collect sales taxes on California sales.

It's all part of a deal struck between the internet giant and state lawmakers last year.

KPBS Morning Edition Host Deb Welsh spoke with SDSU Accounting Professor Steven Gill about what this means for consumers.

Professor Gill said there's not a real upside for shoppers.

Cash-strapped California, on the other hand, stands to gain an extra $300 million a year in tax revenue from online sales.

Currently, Gill explained, consumers have a use-tax liability, which they're supposed to report on their State of California Income tax returns.

The problem is very few Californians actually do that.

"This Amazon tax is a good way at getting at that so they can centralize their collection efforts on Amazon and other retailers as opposed to the 30 million Californians who might be buying $100 to $200 worth of things off the internet and trying to collect $20 worth of use-tax," said Gill.

San Diegans can save money if they shop on Amazon before Saturday. The amount could depend on local tax rates, which range from 8 percent to 9.5 percent.

But Gill cautions all consumers are liable for the use tax.

"So what' they're doing is not escaping the liability for tax but probably escaping claiming it and actually paying it."

Amazon has also built a distribution center in San Bernardino which is reportedly expected to create 1,000 jobs.

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Avatar for user 'jskdn'

jskdn | September 10, 2012 at 7:10 p.m. ― 4 years, 1 month ago

What large internet retailers besides Amazon have signed on to this deal?

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Avatar for user 'Janet23'

Janet23 | September 11, 2012 at 8:16 a.m. ― 4 years, 1 month ago

Most of what I have read has only focused on the new sales tax, but it's good to read about what will come from it: California will gain $300 million a year in tax revenue and Amazon's new distribution center in San Bernardino is expected to create 1,000 jobs.

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Avatar for user 'SamanthaH'

SamanthaH | September 11, 2012 at 10:42 a.m. ― 4 years, 1 month ago

Does this apply to shoppers with a billing address or shipping address in California?

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Avatar for user 'Marissa Cabrera'

Marissa Cabrera, KPBS Staff | September 11, 2012 at 10:45 a.m. ― 4 years, 1 month ago

Per Amazon; The tax rate applied to your order will generally be the combined state and local rate for the address where your order was shipped. Therefore, the sales tax rate applied to your order may be different for an order shipped to your home address versus an order for the very same items shipped to your work address.

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