Amazon to start collecting California tax next year

Amazon will start collecting California sales tax for its online transactions starting next year.

Though lawmakers wanted California tax to be collected by Amazon with immediate effect, a reprieve has been granted, making it mandatory from September 2012 onwards. The move comes with the backing of brick and mortar stores, which feel it is a means of raising much needed funds. Legislators in New York are being fought by Amazon on the same collecting tax issue, and in Texas and South Carolina, the company may use shutting down of warehouses as a gambit in ongoing negotiations.

According to California tax lawyer, Robert W. Wood, “Other states needing money will look and say, ‘It wasn’t a smooth process, but California is going to come out ahead.” Unless there is federal legislation on the issue, Amazon will start collecting tax for its sales in California starting September 2012. Customers are, in fact, required to pay tax when purchasing online, but very few of them actually do. California’s lawmakers hoped to collect at least $200 million from online retailers in the current budget but will now apparently have to go elsewhere for the funding. The matter is now in the hands of Gov. Jerry Brown; the vote occurred this Friday and there was minimal dissent on either side.

Image By: CrunchBase

Related Post for Amazon to start collecting California tax next year