One of the benefits of shopping with online megaretailers like Amazon is often being able to avoid pesky sales tax. The state of California is attempting to "correct" that issue, which it saw as a legal loophole, by introducing legislation requiring online retailers to comply with the state's sales tax laws. The movement was signed into law yesterday, meaning that as of today, Amazon should be required to collect sales tax on all purchases made from within the state — but it refuses to do so.
If a company has no physical presence in the state of sale, it's often not required to collect tax when someone from that state purchases an item online. Past Supreme Court cases have upheld this notion. Because of this, Amazon recently cut ties with all physical distributors in California, effectively killing any claim that the online giant physically operates within state lines.
Regardless of that, state officials in California say they expect Amazon to comply with the new law, but Amazon's legal team doesn't see things in quite the same light. Amazon VP of Global Public Policy Paul Misener stated, "This legislation is counterproductive and will not cause our retail business to collect sales tax for the state." But California is sticking by its guns and claims that if sales tax is not collected at the point of purchase, the state will receive a rather sizable bill at the end of the year in order to balance the books.
Posts
