Amazon, Online Retailers to Start Collecting Sales Tax in California
In San Francisco, Chris Cheng has been on a buying binge. He's been cashing in before he pays sales tax, and he's not alone.
A new California law is requiring Amazon and other online retailers to start charging sales tax. Across the country, states estimate they lose some $11.5 billion a year in uncollected sales tax.
"When you're losing that sales tax revenue, it means it's affecting your roads, it's affecting the resources for local government, it's affecting the resources for education, so it's a huge hit."
So California Congresswoman Jackie Speier is pushing a bill to give all states the authority to make online retailers collect sales tax. She says tax-free purchases have given online stores an unfair advantage.
"People come in, they look at the product, they kick the tires, they take the knowledge that the retailer has about that product, then they go onto the phone and buy it on Amazon."
Right now, Amazon collects sales taxes in only seven states. It will add seven more, including here in the future. Amazon is also going to build two huge centers in California, creating over 1,000 full time jobs.
"I thought about well, you know that means I can't save that money anymore. But most importantly, Amazon's bringing jobs here to California and for me that's a big win."
Chris Cheng says he'll continue to shop online where he still expects to find bargains, even if they're no longer tax free. Now, Amazon has agreed to collect a sales tax on items sold in Nevada beginning next year, or earlier if there's a new federal law. That agreement is expected to raise at least $16 million a year for the state of Nevada.