Amazon to Start Charging Sales Tax in Select States

Amazon to Start Charging Sales Tax in Select States

It's the beginning of the end.

The end of ordering from Amazon without paying sales tax, that is. Starting Saturday, the online retailer will charge sales tax on orders shipped to California, the seventh state in the country where consumers will pay the extra cost, and it has agreements to start collecting taxes in six more.


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Time reports that the new charges are due to the resolution of a debate as to whether internet retailers should have to charge sales tax. The California legislature declared that the retailer was depriving the state of millions of dollars of rightly owed money and expects to take in $200 million new dollars in e-commerce taxes, $80 million of which are expected to come from Amazon alone.

Amazon fears that its customers, reluctant to pay the new charges, will stop the well-known practice of previewing merchandise at brick-and-mortar stores and then making the purchases online. After all, the advantage to browsing in person and then ordering online is the money saved, and with a smaller gap between the price in store and the price online, it might not be worth the delayed gratification.

And that's why The New York Times reports that the retailer is building a new set of warehouses across the country in order to provide same-day delivery. In fact, it appears to be constructing them in the same states where it is giving up its no-sales-tax advantage. Amazon wants to lessen the blow to its customers by providing service even better than before. Even if the price gap between browsing in person and ordering online has shrunk, gratification at least won't be delayed.


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