On Saturday, California tax law finally catches up with the 21st century: some online retailers -- most notably, juggernaut Amazon.com -- will start charging sales tax for items sold in California if they have warehouse space in the state. Though we always knew there was something fishy about the tax exemption, as a consumer this development does not thrill me. As a citizen of the state, I suppose it's fine. The more money we can raise, the better.
As an urbanist, however, I say bring on the tax.
I don't think that humanity will ever be able to take full stock of the impact that e-commerce has had on the urban landscape. The extreme version holds that the Amazon's and Shopzilla's of the world have siphoned customers off from mom, pop, and even the terrestrial chain stores. It has turned the most social aspect of capitalism into something that can be performed in one's boxer shorts, usually at a relative discount. This collision of frugality and convenience has enriched the likes of UPS and FedEx while devastating Main St. and even the malls.
Then again, no one will ever be able to disaggregate the impacts of e-tailing from those of countless other factors including the rise of big boxes, the expansion of the suburbs, and many Americans' chronic indifference to living their lives in public. Nevertheless, the 7.25% that Amazon wasn't collecting did not help matters (reports indicate that few other e-tailers will be affected by the new law because they do not have physical presences in California).
Gov. Jerry Brown and bill sponsor Charles Calderon (D-Whittier) presumably weren't necessarily thinking about land use when they approved AB 155, which was passed following negotiations with Amazon and other big retailers. They wanted the cash -- as did lawmakers in the 13 other states with similar laws. But in a roundabout way, the instatement of sales tax offers a new -- and potentially positive -- twist on the fiscalization of land use.
As CP&DR publisher Bill Fulton has written, tax structures often inadvertently dictate the types of land uses that cities and planners promote. If you stand to collect a lot of revenue from auto sales, then an auto mall is your best bet. If Main St. requires a lot of city services but doesn't exactly rake in the tax money for selling baubles like books and lightbulbs, then maybe it's OK to let them fade away. And if tract homes fill city coffers more than downtown apartments do, then let's rev up those bulldozers.
The great thing about the e-commerce tax is that pretty much no one is buying cars on the internet in the first place. It's the small appliances, clothing, office supplies, and books that are going to get relatively more expensive. I'm not sure how elastic all of these goods are -- or if there's even such thing as cross-elasticity between online retail and brick-and-mortar stores -- but it's tempting to think that somehow, in the aggregate, at least a few customers will be drawn back out into the daylight now that Amazon doesn't have a built-in 7.25% price advantage over everyone else.
Usually, fiscalization of land use refers to the competition between cities to lure big retailers, but in this case, the entire state benefits.
In my fantasy world, that margin should be enough to make a thousand stores bloom, ideally in those small vacant storefronts that have been multiplying statewide ever since the recession first hit. These stores would all be locally owned -- since many big chains, most notably Borders and Barnes & Noble, are in trouble -- and they'd be the types of places where neighborhoods would bump into each other. The money they spent would go right back into other locally owned businesses. Amazon would shrivel ever-so-slightly.
That fate is not, of course, what Amazon has in mind.
The company now building a new series of "fulfilment centers" (i.e. warehouses) nationwide, partially in response to the new California law, in order to assure faster shipment of its goods. The first of several planned for California will be in Patterson, 85 miles east of San Francisco, and the next will be in San Bernardino. Amazon currently ships to California from facilities in Las Vegas and Reno (SacBee has a nice map). Amazon is shooting for delivery in two days once the network is up and running. While warehouses might not be planners' favorite typology, at least some construction jobs and permanent jobs will come with them.
It's funny, though. If my local bookstore hadn't closed four years ago, I could have taken a five-minute walk to pick up that new copy of Small is Beautiful or The Economy of Cities instead of writing this blog. And the state deficit would have been smaller by two bucks.
