There was an uproar last year when Amazon.com began charging sales tax. Devotees, enraged and disappointed, vowed to boycott shopping Amazon, since the sales tax savings was what the site was good for. And, of course, the convenience factor. Oh, yeah...and the "free" Prime shipping. In the end it's a pretty good bet that about 98 percent of the enraged went right on shopping Amazon as if nothing had changed at all.
In the wake of that non-event, it should be no surprise that Amazon is now charging sales tax on the Prime membership subscriptions, but it was a little shocking nonetheless. So...is it legal? Certainly. Is it necessary? Not really. Is it nice? Not at all. But Is it worth it? That's the bottom line.
In the city of Los Angeles, the sales tax rate is currently a whopping 9 percent. This increases your $79 renewal fee by $7.11, totaling $86.11, or $7.17 per month.
If you rent only free movies on Amazon Prime, then you've bested Netflix and Vudu by at least $.80 per month. If you rent pay-per movies, then your savings decrease exponentially, of course.
However, consider this, if you already subscribe to another movie rental service at $7.99 monthly, this additional $7.17 cost is redundant (remember that you've paid for it all up front so it doesn't look like another monthly charge, but that's what it is.)
There is, of course, that great Amazon Prime free shipping feature. The thing is this: Amazon prices are often not the lowest around. What you might save in "free" shipping, you pay for in retail, so is there any real savings there? And how many of your purchases are impulse-buys due to Amazon Prime's free shipping?
It's true that we pay tax whether we go out and shop or stay in and shop, however by shopping in a store we have a better chance of getting a better price. Paying sales tax on an online shopping site membership doesn't make fiscal sense. Sure, the tax may only be $7.11, but that's about two gallons of gas.
If you live outside of LA, that is.