No free lunch at Amazon
To everyone planning to spend the entire weekend on their smartphones, their laptops, their tablets or their various other electronic gadgets in order to shop at Amazon.com before Sept. 15, when the mammoth online retailer starts collecting sales tax on California purchases:
You do know, don’t you, that you already have to pay sales tax on your online purchases? Yes, it’s officially called a “use tax” rather than a sales tax because Amazon is an out-of-state company. But that’s only a technicality. You owe the same tax, whether it’s called a sales tax and your online seller calculates it for you (and adds it to your bill), or it’s a use tax that you have to add up yourself and send in to the Board of Equalization (right away) or the Franchise Tax Board (on your state income tax return at the end of the year).
So even if you hurry up and buy all your stuff now, before Amazon begins adding the tax to your bill, you still have to pay it. You’ve had to pay it all along. Retail sales didn’t magically become tax-free when they moved from Main Street or the mall to the Internet.
It’s not really that different from income taxes. Even if the government didn’t automatically deduct income tax from your paycheck, you’d still calculate what you owe and send it in, right? Of course you would. Wouldn’t you?
There’s nothing new here. If you buy a sweater or tulip bulbs or whatever by mail order from an out-of-state company that doesn’t add sales tax to your bill, you still have to add up and send in the tax. If you buy a TV set in Nevada or Oregon and drive it to your home in Los Angeles, you still have to add up and send in the tax. Same with online sales.
So if you’re racking up big purchases online right now without planning to pay the tax, perhaps it’s best — for you, anyway — to not talk about it much, unlike the folks quoted in The Times’ Sept. 5 story on the Amazon buying spree. True, the Board of Equalization has been a bit sluggish about enforcing sales and use tax requirements on purchasers, but it does, every now and then, crack down.
In a few days, though, it’s California that will be better off, when it starts to recoup from Amazon some of the tax revenue that has until now gone missing. Let’s hope other online retailers, which are also required to eventually charge the sales or use tax, follow suit soon.
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