Last year, Amazon made a deal with California to support the collection of sales tax from residents, which will take effect this Saturday. Residents will pay anywhere from 7.25 to 9.25 percent tax, depending on where items are shipped within the state. Before balking at the idea of paying the tax, consider the economic benefit this brings to the state.
In exchange for tax breaks, Amazon supported the policy change and built warehouses in two of the stateaEUR(TM)s most economically depressed areas: San Bernardino County and Stanislaus County. In fact, the City of San Bernardino filed for bankruptcy a few months ago. Both San Bernardino and Stanislaus Counties represent areas plagued by unemployment rates well above state and national averages.
Building warehouses in these two cities will create 2,000 jobs, and the taxes Amazon will collect represent an estimated $150 million in annual revenue for the state. Amazon also promises to bring 8,000 additional full time jobs and 25,000 seasonal jobs to the state by the end of 2015. It seems the company believes California residents are eager to increase their online shopping aEUR" maybe to shorten the time they spend behind the wheel.
In a boon for Amazon customers, Sacramento, San Francisco, and Los Angeles will join the ranks of 10 other U.S. cities that qualify for same-day shipping. Also, the number of Amazon Prime members (who pay $80 per year for unlimited two-day shipping) is only likely to increase now that distribution centers are within the state. If you think getting your new tennis racket in two days or less is excessive and unnecessary, think again. The digital times in which we live are based on instant gratification: when we want something, we want it nowaEUR"and weaEUR(TM)re willing to pay extra for it.
So go ahead and buy that 24-pack of tube socks you need or those sunglasses youaEUR(TM)ve been eyeing. If youaEUR(TM)re in California, youaEUR(TM)re helping someone put food on the table.