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California to Internet Shoppers: Prepare to Be Taxed.

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Online Shoppers: Prepare to Be Taxed

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SWANSEA, WALES - NOVEMBER 26: Staff at the Amazon Swansea fulfilment centre process orders as they prepare for what is expected to be their busiest Christmas on record on November 26, 2010 in Swansea, Wales. The 800,000 sq ft fulfilment centre, the largest of Amazon's six in the UK and one of the largest in the world, is gearing up for 'Cyber Monday', which this year is Monday December 6, and is predicted to be the busiest online shopping day of the year. In 2009, Cyber Monday saw 2 million orders received at a rate of 23 orders per second. (Photo by Matt Cardy/Getty Images)

Attention on-line shoppers. Best start stocking up on all those e-clothes, electronics and book deals.

Your tax-free shopping experience is about to end.

Such is the conclusion following Thursday’s news conference at the Ronald Reagan State Building in downtown Los Angeles.

Governor Jerry Brown, before a packed audience of reporters, explained his veto of the state budget passed by legislative Democrats the day before.

But there were other bills sent to his desk that he is thinking about signing.

One of them is the so-called "Amazon Tax" -- SB234 by Berkeley Democratic Senator Loni Hancock.

That measure would authorize the collection of sales taxes from out-of-state e-commerce retailers, Amazon.com being the biggest among them.

Her bill, along with two other Assembly bills doing essentially the same thing, were sent to the Governor’s desk.

Asked about them on Thursday, Mr. Brown said he tended to think favorably of idea which Democrats say will establish parity with brick and morter businesses and raised over a billion dollars for the state.

Brown called it a “common sense idea.”

The problem with charging sales tax on-line is that it could present a major disadvantage to e-retailers.

Internet shopping already has the built-in downside of shipping fees.

Shoppers freqently must decide whether it is worth the wait and the cost of mailing the goods through UPS as opposed to going to the store and buying it now while paying the state sales tax.

Adding sales tax to on-line shopping means you will be paying the tax (8.25% statewide) along with shipping… all for the advantage of waiting for your purchase.

No wonder Amazon has lobbied against the bills in Sacramento and in other states.

Five states have passed such laws, which resuted in Amazon and Overstock.com cutting business ties with affiliates in those states.

They have promised to do the same in California.

Amazon wants a “national soluton” to the sales tax issue. Fat chance. In the meantime the Governor will decide by Jun 27th on the internet tax bill.

Time to get shopping.

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