Amazon, Web Retailers Begin Charging Sales Tax in California
LOS ANGELES -- The days of most tax-free Internet shopping in California are over.

After years of controversy, the world's largest online retailer, Amazon.com Inc., was set to begin collecting state and local sales taxes on California purchases at 12:01 a.m. Saturday.

Depending on where you live, sales taxes in the state range from 7.25% to 9.75%.

New state and local government revenues from Amazon alone are expected to be as high as $100 million during the first year of collection, with the total for all Internet sellers reaching $317 million in the year that began July 1.

Much more money is expected to flow into government coffers in coming years as e-shopping expands.

California consumers are divided on the Internet sales tax issue. Many who have avoided taxes in the past were rushing to make last-minute tax-free purchases Friday.

"Definitely stocking up … can't beat 8% or 9% savings," tweeted Patrick Chen, who identified himself on Twitter as an Internet game developer.

Others see the sales tax as a matter of fairness. "You pay it any time you go to the store," Newport Beach Internet shopper Sarah Lafare said. "People who bellyache about it, I'm not in sympathy with them."

Experts say Amazon purchases in California account for about half of all online purchases statewide. But Saturday is also a big day for many other Internet merchants, whose sales operations require them to start collecting the sales tax as spelled out by a 2011 state law.

Both Amazon and state officials, who have been at loggerheads for years over the issue of Internet sales taxes, say they're prepared for the big change.

"The agency is ready," said Jerome E. Horton, chairman of the state Board of Equalization, which administers the sales tax.

The tax-collecting agency plans to hire as many as 35 new auditors, collectors, lawyers and other personnel over the next three years, and will redirect to the Internet sales tax effort some of its 90 existing investigators on an "as-needed basis," he said.

The tax agency's staff should have a good sense of which of the hundreds of out-of-state Internet sellers are responsible for collecting California sales taxes and how much money they should be sending to Sacramento, Horton said.

"We expect some to seek to gain market share by advertising that they're not collecting, telling the whole world," he said. "But we'll be listening as well."

Horton said he's pleased that Amazon finally is "playing by the rules."

After fighting legislative efforts to force it to collect sales taxes, Amazon last year struck a deal with Gov. Jerry Brown.

The company promised to open two 1-million-square-foot distribution centers in Northern and Southern California and start charging sales tax as of Saturday.

The deal resulted in "a win-win law that has allowed us to expand our investment and job creation in the state," Amazon spokesman Scott Stanzel said.

Amazon's experience in states where it collects the sales tax proves that "we offer customers the best prices with or without sales taxes" in addition to having "vast selection and fast delivery," Stanzel said.