The battle over internet sales tax collections is entering its final phase, and tax collection is going to win.
California and Amazon reached an agreement last year to
give Amazon a one year grace period before Amazon would start collecting sales
tax on purchases by California
residents. The year is up.
Why is this a good thing for Amazon and
California? Well a couple of reasons. First of all Amazon will now start building
distribution centers in California
which will benefit customers and the economy.
The resolution of Amazon's tax fight in
has allowed the company to start building a network of distribution centers.
Soon, customers in the nation's most populous state will receive shipments from
warehouses in California San Bernardino, which is near Los Angeles, and Patterson, near the San
Francisco Bay Area instead of from Reno,
Nev. or .
Each new center is expected to bring hundreds of jobs to Phoenix , where the unemployment rate is
the third highest in the nation. California
So jobs will go up, and guess what, customers will get improved delivery, maybe even same day delivery.
Oh yes, the state of
will start collecting sales
tax revenue. No this is not new taxes,
citizens are supposed to self report sales taxes they owe on purchases where
the tax was not collected. What, only 1%
of the people did that? Amazing. California
The other thing this does is to make the playing field a little more fairer between the brick and mortar businesses and the internet businesses. The new collections will discourage shoppers from going to stores, checking out the merchandise and then ordering on line and avoiding paying sales tax. So there are really no losers, unless one counts those who avoided paying taxes and who will now not be able to avoid paying taxes.
And yes, if anyone is asking The Dismal Political Economist lives in a state where Amazon and other internet retailers who do not have a physical presence in the state do not collect sales tax. And yes he does check that box on his tax return and pays the sales tax according to the formula. Is that the right number? Well let's just say it probably evens out.