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Tax-Free Ride Is Ending for Online Shoppers in California, Pennyslvania

Posted Aug 21, 2012 1:16 PM CDT
By Rachel M. Zahorsky

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Video by Bloomberg Law.

As congressional support builds for a federal internet sales tax law, online shoppers in Pennsylvania and California will pony up to the taxman next month.

Starting Sept. 1, Pennsylvanians will pay a 6 percent or more sales tax, depending on the county, for online items purchased from retailers with a physical presence in the state, the Pittsburgh Post-Gazette reports.

The new tax is an attempt to collect some of the $254 million to $410 million (according to a 2011 study by Carnegie Mellon University professor Robert Strauss) in lost revenue from the state's online shoppers. It would apply to all purchases made in, delivered to or used within the state.

California e-tailers will start charging customers a sales tax Sept. 15 under a new state law that could boost the state’s coffers by $250 million to $500 million, ABC affiliate KFSN-TV reports.

Internet sales giants Amazon and Overstock, brick-and-mortar businesses, and smaller local retailers alike are eying a growing movement in Congress to impose a federal Internet tax.

"The sales tax issue needs to be resolved at the federal level, and we're actively working with the states, retailers and Congress to get federal legislation passed," an Amazon spokesperson wrote in an email to the Post-Gazette.

Amazon has agreed to build warehouses in a number of states and will eventually collect taxes from customers in those jurisdictions, according to a Bloomberg Law video report.

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