Legal News

No More Tax-free Shopping from Online Retailers in California
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)

Until now, California residents making online purchases had things cheaper as online retailers were not charged sales tax for state residents. But all that is going to change from September 15, and from now on purchases made by California residents on or other online retailers is also going to see an addition of local sales taxes.

The new law is trying to collect more revenue for the state and its people, by the people, and from the people, obviously. It is meant to address the inequitable situation that was there with brick and mortar establishments having to pay sales tax and having to compete against online retailers who did not need to pay local sales tax. By rough estimates, the move can add about $100 million a year to state coffers.

According to industry reports that sparked off the initial debate for the new law demanding taxation of online retailers, individual states are losing about $11.5 billion a year they could have charged residents, had they been making purchases from brick and mortar stores. California Congresswoman Jackie Speier (D), of the 12th Congressional District, told CBS News, “When you’re losing that sales tax revenue, that means it’s affecting your roads, it’s affecting the resources for local government, it’s affecting the resources for education.”


The bottomline of course, is that not being able to collect taxes affects the pockets of politicians and their cronies who get the government contracts for ‘development’ regardless of political allegiance. This is something that needed to be redressed and it has been done. On the other hand, the grievances of brick and mortar establishments were very fair and equitable, as the burden of sales tax on them made them lose their competitive edge and suffer losses.

Is this going to increase the revenue of brick and mortar shops? May be, but that is questionable. Possibly people would continue buying online due to the ease and time saving component and also the facilities that allow to search and compare a large number of products without burning gas or wasting much time. For those purchases, which people like to make from brick and mortar shops, they did that anyway, though after researching online. So, online retailing is not going away, the only difference to the scene made by the new law in California is that online purchases in California would become costlier.

While Amazon and other online retailers already pays such local taxes in seven states of the country, may be the best gain from the California action has been that Amazon has agreed to settle the issue by building two distribution centers in California and adding about 1000 full-time local jobs.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!


Interesting Legal Sites You May Like




Search Now

Mid-level Tax Associate Attorney

USA-CA-Los Angeles

Los Angeles office of an AmLaw firm seeks mid-level tax associate attorney with 3-5 years of experie...

Apply Now

Real Estate/Transactional Attorney

USA-PA-Camp Hill

Camp Hill office of our client seeks real estate/transactional attorney with experience. The candida...

Apply Now

Corporate Attorney


Laramie office of our client seeks corporate attorney with 2+ years of experience.

Apply Now


Legal Assistant - Estate Planning / Tax

USA-NC-Winston Salem

Spilman Thomas & Battle, PLLC, seeks an experienced Corporate Legal Assistant to join its Winston-Sa...

Apply now

Contract Attorney



Apply now

Immigration Paralegal

USA-FL-Miami Gardens

$38,000 - $42,000 a year Prepare tables of contents with supporting evidence, fill out legal f...

Apply now

Commercial Litigation and Insurance Defense Associate Attorney

USA-FL-Fort Lauderdale

Kim Vaughan Lerner, a downtown Fort Lauderdale firm practicing in the areas of commercial litigation...

Apply now


To Top