Get Smart about Sales Tax™

After all the discussion, the litigation and the speculation I can personally confirm that Amazon ARE charging sales tax on Internet purchases shipped to all California addresses. And in my opinion, a long overdue end to a classic rip off of consumers and small businesses.

As I have written before, and hate to remind the "fools" who rushed to buy from Amazon yesterday in the hope of saving sales tax, you have been scammed! Residents of California have been responsible for consumption tax on goods consumed in California for ALL times. The cost of tax was NEVER saved. What did happen is Amazon were not obliged to collect the tax from you until today - while YOU were still required to declare the tax - now called Use Tax - in your next state income tax return.

To not declare this tax is a form of tax evasion. Be my guest if you want to do this. But it is not smart, and carries felony charges if the state decides to prosecute!  As my late father always said "if you are going to steal, at least steal enough that you will live comfortably ever after".

Unlike one report I saw claiming that Amazon will be charging 8.75% sales tax - Amazon are correctly collecting all three elements of California sales tax. First: The California State Sales Tax of 6.25%; Second: The California County Sales Tax of 1.00%; Third: The various district sales taxes applicable to each address, not based on zip code, but on the actual districts that are applicable to an address. This can range from addresses where there are NO additional district sales taxes, to districts like Mill Valley where the taxes are 0.75% - to Santa Monica where the district taxes are 2.00% - I believe the highest is South Gate Los Angeles - with an additional district tax of 2.5%

And compliments to Amazon. They are using district boundaries correctly. I am familiar with a few addresses that fall just outside various district boundaries. There is an address on Sunny Oaks Drive, Zip code 94903, that is literally a few yards outside the city district of San Rafael. Being outside the city district, it's resident is NOT required to pay the 0.5% San Rafael district tax - they are required to pay 0.75% SONOMA-MARIN AREA RAIL TRANSIT (SMRT)/TRANSPORTATION AUTHORITY (TAMC) CA SPECIAL TAX.

Well done Amazon - these district sales taxes are why residents MUST pay Internet sales tax based on the address of where the goods will be consumed. They go to fund the exact services that you depend on, and that your locally elected officials have determined are helpful to your community. In observing that Amazon are calculating the district sales tax correctly, we can have confidence that they will also be reporting it correctly - and YOUR district will see the revenues soon. 

I do have a question on shipping. The general case is that there is NO sales tax on shipping charges passed on by a public carrier. I note that Amazon ARE charging sales tax on the shipping charge. Interesting, but clearly this has been thought out by Amazon and they have determined that they need to do this.

Let us hope that the misleading information that we the consumer, can save on sales tax by buying on the Internet will soon be ended.


Open4Tax - Get Smart about Sales Tax™