California 'Amazon Tax'

On Friday a new law will take effect in California that will make it the seventh state to require large out-of-state retailers to collect sales tax from customers within the state when purchases are made online.

Those who support the law are hoping that it will help generate an estimated $317 million annually, however, similar laws enacted in both North Carolina and Rhode Island were actually followed by a decline in tax revenue.

The law will target large retailers that make commissions on sales resulting from referrals sent to the online retailer from people or businesses in California. When a business makes more than $10,000 in sales resulting from referral, and has total sales of more than $500,000 in the state of California, they are subject by the law to collect tax.

Find out where your state stands in the sales tax battle with online giant Amazon by visiting The Street and checking out the map in their article: Amazon Sales Tax: The Battle, State by State by Jeanine Poggi.