The Amazon Sales Tax Loophole

On Saturday, Amazon.com began collecting sales taxes for the first time on Internet purchases made by California residents. The move, which Amazon battled for years, represented a major victory for brick-and-mortar retailers, particularly small, independent stores who correctly argued that Amazon’s sales-tax exemption had awarded the online giant an unfair competitive advantage. However, there’s a large loophole in the sales-tax deal that is allowing a substantial portion of products sold on Amazon.com to remain tax-free.

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