This means that the end of the tax free shopping on line party is starting to end, as Amazon cuts a deal with the state of California on collecting sales tax on sales to customers in the state. For Amazon retailers they should not see this, as it will be tacked on at the end of the bill and sent by Amazon to California’s empty tax coffers. What this means in the bigger picture is that this was an unwinnable battle, but one worth fighting.
Originally the no sales tax was an awesome idea to help a new industry get a good foothold in the market place, backed up by federal laws and a ton of states wanting these companies to come in and provide awesome jobs to people. It worked, we now have a number of 800 pound gorillas in the online marketplace, which serve the needs of millions every day. This is a good thing, and what the internet should be about.
I do not have a love affair with taxes, but I also understand why we need them, I like good roads, good schools, I like feeding the starving regardless of their immigration status. I also love it when my taxes go to bust fraudsters who are not doing what they need to do to keep on getting benefits. I love paying for people to retool and retrain by going to college. I am just a diehard liberal when it comes to that aspect of taxes and I have no worries about it at all. My taxes go to good things, even if those good things are not necessarily what I happen to believe in, but see a value in them. That is where California wins on this one, and why the party is starting to wind down on tax free shopping online for everyone.
We often like to talk about “game changers”, this is the big one for states struggling to pay for anything, or in the case of California, in serious danger of some bad adverse consequences due to the lingering downturn in the economy.
This is not big win for shoppers, this is not a big win for Amazon, this is not a big win for people who use Amazon to support their companies. This is a big win for box retail and the states. EBay and others are next, if Amazon cut this kind of deal, everyone else will have to fall in line, the dam has been breached, and taxes are now coming to your online shopping experience.
Under the deal, Amazon would delay collecting taxes until September 2012, Assemblyman Charles Calderon (D-Whittier) said. The new law had mandated that Internet retailers start collecting state taxes in July if they had offices, workers or other connections in California. Source: LA Times
So there it is, and this will make it much more interesting for people trying to find a deal online without taxes. Every state is going to jump on this one, so if you are planning a big ticket purchase best to do it sooner rather than later. This is not a world as we know it ending, rather this is more about what is probably the right thing to do, and while I do not know what this will do to any sales we have in California, I am really hoping that the taxes will be collected at the Amazon/Ebay level so I don’t have to try to sweat this one at all.
- Amazon.com cuts California sales tax deal in stunning turnabout (mercurynews.com)
- BREAKING: New agreement in Amazon tax dispute (sfgate.com)
- Amazon offers jobs in California sales tax showdown (bizjournals.com)
- Amazon in deal with legislators over tax law: report (huffingtonpost.com)
- Should Amazon Be Required to Collect Sales Tax? [POLL] (mashable.com)
(Cross-posted @ Techwag)