Internet Sales Tax Laws

Many Amazon Customers Will Escape CA Sales Tax

The online retailer says it won't collect taxes on "fulfilled by" sales

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Amazon.com's agreement with Sacramento officials means that, starting Saturday, it will collect sales taxes on items that it sells to California residents.

But Amazon will continue to not collect taxes on hundreds of thousands of items that it lists for sale on its Web site, stores in its warehouses, and packages for quick shipment to California residents.

Those orders—called "fulfilled" by Amazon—amount to a tax loophole that has left Sacramento tax collectors a tad unhappy. California sales tax rates are among the highest in the country, topping out at 9.75 percent, meaning the apparent tax savings can add up quickly.

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