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Final holiday season for tax-free online shopping in California?

November 24, 2011 12:00:00 AM PST
Avoid the lines and do your holiday from the comfort of your own home. Every year online holiday shopping grows in popularity. But this may be the last year you will be able to shop online tax-free.

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

"No sales tax. No shipping and handling fee. But then also too, it's just the comfort of being at home," said Descargar.

In fact, online holiday shopping is already off to a solid start.

ComScore reports online holiday shopping is up at least 14 percent for the first 20 days of November compared to last year.

But this season may be the last time California residents will enjoy zero sales tax on most cyber purchases.

If the federal government fails to come up with national online sales tax, California's version automatically kicks in next September.

Many shoppers are disappointed the free ride is almost over.

"Money's tight. Everybody can use a break nowadays, definitely," said online shopper Robin DeCristofaro.

Since 1935, Californians are supposed to pay a use tax for out-of-state purchases equivalent to a sales tax. In modern times, it 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 do, though, making the state lose out on more than $1 billion in revenue a year. And during tough budget times, it's caused severe cuts to education and social programs.

"When everybody pays the rightful 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 Runner (R-Board of Equalization).

Until the so-called "Amazon tax" goes into effect, the state is relying on your honesty to come clean at tax time in April.

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

That's enough for Bernadette Descargar to change her online habits.

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

And that's the point: To even the playing field for brick-and-mortar stores and "e-tailers."


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