If you've got items sitting in your Amazon shopping cart that you've not yet purchased, you might want to consider moving into the checkout line.
Friday is the last day to buy from the online retailer tax-free: Amazon has to charge sales tax on purchases for California residents this Saturday. Sales tax in the region varies by county, and in Santa Clara County its 8.375 percent.
The income—legislator's hope—will be a boon for the cash-strapped state. But the increased prices for online purchases is welcome relief for brick-and-mortar stores, who feel the playing field for customers will be a bit more level. Locally, Mountain View's bookstores feel that they could also benefit.
"Amazon can monetize their costs over a wide range of products enabling them to price books at a predatory level," said Glen Robbe, manager at Books Inc. "We don't have that luxury so any kind of further discriminator (like the sales tax holiday they've enjoyed) certainly hurt us."
Up to now, buying online at Amazon.com saved customers money, since no sales tax was collected.
"It will obviously decrease the appeal of Amazon a little bit, but it's not the whole reason why people go to Amazon," said Tandava Waldon, a manager at , one of three book retailers in Mountain View. "There's still the convenience of shopping from home in your pajamas."
Bookbuyers has no comment.
State lawmakers in California–a state which desperately needs cash–reached an agreement last year with online retailers, including Amazon, who agreed to collect a sales tax in September. Those sale tax funds will be returned to the state.
According to the LA Times, about half of the projected $316 million raised in the first full year–and put into state coffers–is expected to come from merchandise sold by Amazon.
However, the agreement between Amazon and California may not last long. The Orange County Register reports that the agreement was primarily a compromise meant to get a year's reprieve in collecting the tax in exchange for promises to add jobs and distribution centers in California.
CNNMoney says Amazon already charges sales tax in six states: Kansas, Kentucky, New York, North Dakota, Texas and Washington. Pennsylvania will join California in sales tax charges in September. New Jersey, Virginia, Indiana, Nevada, Tennessee and South Carolina are all expected to collect state sales taxes from online retailers within the next few years, adding millions to state accounts.
States estimate they lose $23 billion in annual sales taxes, some $11.5 billion of it from online purchases, according to the National Conference of State Legislatures.
Meanwhile, Seattle-based Amazon has been expanding its physical presence in California, according to the San Francisco Chronicle. The Chronicle says that in June, it leased 83,000 square feet just south of San Francisco's Financial District, and is close to signing a deal for 600,000 square feet in Sunnyvale.
Amazon is also expected to open two California fulfillment centers that will employ at least 1,000 workers each in San Bernardino and Patterson. Amazon has set up a website to receive applications.
Books Inc.'s Robbe is optimistic.
"I think it might help especially with the 'showrooming' effect we've been experiencing, i.e. customers who peruse our shelves, see what's new and interesting (even take pictures of the dust jackets and ISBNs) then leave the store and purchase online," he said. "They might think twice knowing they aren't saving the sales tax amount any longer."
At East West, Waldon does believe that the effect of Amazon paying taxes could be positive, just slightly.
"It will make it fairer and they'll understand what we have to go through," he said. "They'll understand what we have had to go through."
When asked if he thought more consumers will walk through the doors, he replied, "you never know."
"But I wouldn't bet the farm on it."
Robbe probably wouldn't bet his farm, if he had one, on it either.
"What we as booksellers need to do a better job of is convincing those 'customers' that without buying from your local bookstore on a fairly regular basis for books and gifts, they run the risk of losing their bookstore as a community asset," he said.
Additional reporting by various Patch staff members.
Do you think paying sales tax on Amazon.com is fair? Will it affect your shopping habits? Share your thoughts in the comments.
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