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One more year of tax-free online shopping

November 23, 2011 12:00:00 AM PST
The shopping race to Christmas gets underway in earnest on Friday, but more and more of us will avoid the crowds. Online sales have grown considerably in the past two years.

Online sales made up 11 percent of all sales in 2009 and 30 percent of all sales last year. Online holiday sales are expected to be even greater this season.

Earlier this year, Amazon won a reprieve from lawmakers to delay online sales tax -- so this online season might be the last one when you can get away without paying it.

Bernadette Descarger was at the mall just for Santa photos, not for holiday shopping. Descarger says she'll make practically all of her purchases online as she does the rest of the year.

"With three children, I do it all the time," Descarger said. "No sales tax, no shipping and handling fee, but also it's just the comfort of being at home."

Online holiday shopping is already off to a solid start: ComScore reports holiday shopping is up at least 14 percent for the first 20 days of November when compared to last year.

This season may be the last time California will enjoy no sales tax on most cyber purchases. If the federal government fails to come up with a national online sales tax, California's version automatically kicks in next September.

Many shoppers are disappointed that the free ride is almost over.

"Money's tight," said shopper Robin DeCristofaro. "Everybody can use a break nowadays, definitely. If they're to make us start paying the tax -- bad timing!"

Since 1935, Californians are supposed to pay a use tax for out-of-state purchases equivalent to a sales tax. In modern times, that use tax also applies to internet purchases.

To make it easier, the state added a line on tax forms so people can pay it once a year. Hardly any people do, though, which makes the state lose out on more than $1 billion in revenue every year, and during tough budget times, it caused severe cuts to education and social programs.

"When everybody pays the right amount amount of taxes, that evens out the tax responsibility and we're able to successfully do the things I think citizens would want," said George Runer with the Board of Equalization.

Until the so-called Amazon tax goes into effect, the state is relying on honest at tax time in April.

If you don't want the hassle of saving all your receipts this season, the Board of Equalization is sending out a table of estimates with your tax forms to figure out how much use tax you owe based on your income. The amount owed ranges from $7 to hundreds of dollars.

That enough for Descarger to change her online habits.

"If they do that, it probably would make me more likely to come back to the mall," Descarger said.

That's the point: To even the playing field between brick and mortar stars and e-tailers.


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