California's Amazon Tax Bill Passes State Assembly

June 1, 2011 -

A bill passed by the California State Assembly on Monday aims to help California collect more than $1 billion in taxes from online retailers such as Amazon.com.

Assemblyman Charles Calderon, a Whittier Democrat, claims that the new legislation doesn't impose a new sales tax, but extends one that California should already have been enforcing. The bill, AB155, passed by a vote of 47-16, with the support of one GOP lawmaker. Now it has to pass in the Senate to become law in the state. The question for Californians that work for retailers like Amazon.com is how this might affect their future. If the tax burden is too much, maybe Amazon will simply go to another state where the tax situation is more tenable.

Most Republican lawmakers rejected the bill because they said it would drive businesses out of California, get the state entangled in Internet regulation, and force the state to defend the law in the courts.

The measure extends the sales tax to online companies that have a presence in the state, including those that have sister companies with offices in the state. California is not the first state to impose state-level sales taxes on businesses as politicians look for ways to pay for over bloated and out-of-control budgets.

Source: NBC Los Angeles


Comments

Re: California's Amazon Tax Bill Passes State Assembly

The state has a spending problem, not a tax problem.

Re: California's Amazon Tax Bill Passes State Assembly

For once I agree with the Replicans. This has more chance to be a boondogle for California, the state I call home, then it does to generate revenue and help balance our budget. The only way our budget is getting balanced, and I mean really balanced, is if we modify Prop 13 and cut spending. None of our politicians will have the will to do it until its already too late.

 

EDIT: HAHAHA, I put replicans. They sometimes do seem like an evil alien race, don't they?

Re: California's Amazon Tax Bill Passes State Assembly

Looking over the actual text, it pretty much all falls under the category of "if you have any sort of physical presence in the state, and you're selling stuff to other people in the state, you have to collect sales tax". Frankly, I'm surprised that wasn't already in place. Seems fairly standard practice as these things go.

Re: California's Amazon Tax Bill Passes State Assembly

As much as I roll my eyes at California's relentless penalizing of businesses, I can understand their need for cash because of the serious budget crisis they're in.

It's a good thing California isn't wasting money.  Say for example, if several nanny-state politicians pursued video game legislation all the way to the Supreme Court and had to pay subsequent legal fees.  Thank goodness that never happens.

Re: California's Amazon Tax Bill Passes State Assembly

I don't know.. as much as I personally love tax free on-line shopping.. I think buisnesses and consumers have been abusing this loophole for a bit too long and states do need to find ways to integrate the new economy into thier tax structure.

Re: California's Amazon Tax Bill Passes State Assembly

Yes it is true that this is a loop hole that needs closing, but it is not a problem the states should be dealing with directly. Online sales are interstate sales in most all cases. The States do not have a right to regulate and tax interstate commerce. Only the federal government has that authority. So instead of a hodgepodge of state online sales taxes, they need to be working with the federal government for a unified online sales tax.

Unfortunately, this is made all the more difficult with the 17th amendment in affect. Prior to that amendment the state governments chose the Senators in the federal government as a way to have direct representation. With its passage, the state governments lost almost all means of dealing with the federal government directly.

E. Zachary Knight
Divine Knight Gaming

Re: California's Amazon Tax Bill Passes State Assembly

Glad you mentioned the 17th ammendment. Hadn't bothered to look it up till now and the reasons behind its drafting are pretty interesting.

Re: California's Amazon Tax Bill Passes State Assembly

I should have clarified - I didn't mean penalizing businesses with this law specifically, but there's been a history of tussles between state politicians and California businesses. 

Re: California's Amazon Tax Bill Passes State Assembly

Cali isn't penalizing businesses. They are changing things to more effectively collect the taxes they are owed. When you file state taxes there is that little box called "Use Tax" that you always put zero in because all it does is raise what you owe? Well, you aren't supposed to, you are supposed to put the amount you owe in sales tax for businesses that do not collect sales tax automatically in your state.

From the the WI revenue site...

"What is the Wisconsin use tax?

Use tax is the counterpart of sales tax. It must be paid on all taxable items purchased from retailers who do not collect Wisconsin sales tax and all taxable items brought into Wisconsin.* It applies to purchases made in foreign countries as well as other states. Use tax only applies when Wisconsin sales tax is not charged."

So instead of trusting people to pay it like they should, Cali is just collecting it up front.

 
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