New Tax on Purchases from Online Retailer institutes sales tax on California residents for all online purchases.

Written by JESSIE CHEN / Published September 28, 2012  

Implemented on September 15, a Californian law pushed and other large internet merchants with affiliates inside California to collect taxes.

This nexus applies to out-of-state retailers who have sold more than $1 million to Californians and have had more than $10,000 in sales referred by an affiliate in California in the past year. These taxes range from 7.25 percent to 9.25 percent depending on the shoppers’ county.

California has a cash deficit of over $20 billion and estimates that there are losses of $1.2 billion in online sales taxes. The Californian Department of Finance hopes to receive $260 million in additional sales taxes from now through June 2013.

Peter Choi, president of the Temple City Chamber of Commerce, believes that the new sales tax will benefit businesses in Temple City.

“It levels the playing field for local brick and mortar retail businesses,” said president Choi.

Choi believes that the new sales tax will give buyers more reason to shop locally and bring more tax dollars to Temple City while benefitting local businesses.

“Having to pay sales tax on Amazon will encourage people to buy items locally and put the sales tax dollars locally here in our community which then go to pave the streets and provide public safety and help the city provide services for Temple City residents” said Choi.

Choi urges residents living in Temple City to buy locally.

“When you shop locally in Temple City your money and your sales tax money goes back into Temple City and helps to provide the services for the residents here.”

California isn’t the first state to be taxed on Amazon. Sales taxes have already been collected in the six states of New York, North Dakota, Texas, Washington, Kansas, Kentucky, and Pennsylvania.


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