Amazon Charging California Sales Tax In 2012

In a surprising move Amazon on Wednesday night agreed to start charging sales tax in California in 2012, a move that will be a huge boost for state revenues. California customers serve as a large customer base for Amazon’s $35+ billion retail business.

The online retailer said they had reached a deal with California officials that will stop their fight over a new law that requires sales tax to be collected when online retailers sell products to residents in the state. Since Amazon agreed to drop their battle against lawmakers they have received a one-year reprieve from sales tax.

A source close to the San Jose Mercury News said “it’s a good deal” since it means Amazon won’t be able to find workarounds from the law.

At one point Amazon had threatened to create a referendum which would give voters the chance to repeal the law, then offering to accept terms if a two-year block on sales taxes was offered a deal state Democrats refused to accept, thus leading to a much better one-year reprieve from the state.

Will you still continue to buy products from Amazon if the site begins charging sales taxes? Throw in the cost of shipping and the site’s deals may not look so attractive to buyers looking for a deal and not necessarily the convenience of buying online.