The days of shopping on the internet and avoiding sales tax may soon be over.
California's internet sales tax law goes into effect September 15th, requiring large, out of state retailers to collect a sales tax.
And, the state is taking enforcement seriously. It has hired 100 new auditors, lawyers, and specialists to watch companies.
"I'm wondering why do my customers have to pay a sales tax while an internet retailer in New Jersey doesn't have to," said Steve Illingworth, Vice President of Urner's.
It's a question local retailers like Urner's have been asking themselves for years.
And, when you sell high-end items like televisions and stereos, not charging sales tax is a significant advantage.
"We can compete every day on price with internet retailers. That's not the issue. The issue is the unfair advantage that they're given," said Illingworth.
But, it's an advantage online retailers were never meant to have.
Buyers are supposed pay the sales tax even if they weren't charged one at the time of purchase. It's called a 'use tax.' There's a specific spot on state income tax forms to declare those purchases.
The problem is... enforcing that tax is extremely difficult.
"It's very impractical for small purchases. So, in general, almost nobody finds that they owe any sales tax, let alone keep records to figure that out," said John Emery,
CSUB Dean of Business.
Now, with internet shopping becoming more popular, the tax not being collected is adding up considerably.
"It's not you or me individually, but it's the total amount all across our community and across all the state. Then it gets fairly significant," said Emery.
State officials believe the internet sales tax could bring in more than $300 million in new revenue in its first year, helping to ease the state's budget problems.
And, for local retailers like Urner's, managers say it helps even the playing field with online retailers.
"From our perspective, this legislation is long overdue. There's no doubt internet retailers have a competitive advantage, and this goes a long way to leveling the playing field for us."
Two similar bills are currently making their way through the federal government, similar to California's, that target large online retailers while exempting smaller ones.
But, there is considerable debate about how big retailers need to be in order to charge the sales tax.
