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Amazon “Tax” Begins Saturday

Aired 9/14/12 on KPBS News.

If you’ve got a balance on your Amazon gift card you’d better start spending it now. Starting Saturday, Amazon and other out–of-state retailers will begin collecting sales taxes on California purchases.

If you’ve got a balance on your Amazon gift card you’d better start spending it now. Starting Saturday, Amazon and other out–of-state retailers will begin collecting sales taxes on California purchases.

The new requirement comes after a drawn-out battle last year between the Internet giant and California lawmakers.

Californians are already required to pay a sales tax, called a use tax, on out-of-state purchases.

But Board of Equalization member George Runner says most customers don’t pay it at all. “There is a revenue loss potentially, a lot of people say it’s around a billion dollars, I think it’s quite a bit less, but that is lost as a result of people who buy retail outside of the state of California and don’t remit this use tax,” said Runner.

Runner says Amazon would likely have had to start collecting sales tax anyway, since the retailer is expected to open two new California warehouse centers.

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