California Assembly Approves $1 Billion "Internet Tax"

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California Assembly Approves $1 Billion "Internet Tax"

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The Assembly of California passed a bill that would allow the state to collect taxes from online retailers like Amazon.

Americans are all guilty of buying stuff online without paying the sales tax on it. Technically, if we live in a state with a sales tax, we are supposed to declare the purchase on our tax return and pay the piper, but who has the time (or conscience big enough) to go through all that trouble?

Internet retailers have so far lobbied to keep such transactions tax free, keeping the onus of payment on the customer, but a bill passed today in California would allow the state to tax retailers to the tune of $1 billion. The bill now must make it past the State Senate before becoming law.

Charles Calderon, the Democrat who proposed the law, says that he's not in favor of creating a new tax, just making it legal for California to collect taxes he feels the state is owed. Republicans rejected the bill because they believed attempting to regulate the internet is a losing proposition.

I'm of two minds on this law. One, the government doesn't have the money to pay for basic human services so the fact that online retailers might be circumventing their god-given duty to pay taxes really grates my cheese.

On the other hand, I don't want to pay any more taxes when I buy the new George R. R. Martin book in July.

So yeah, I guess I'm just a bad citizen.

Source: NBC

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And here I'm used to sales tax always (ALWAYS) being included in the price, no matter if I'm shopping online or in a physical store.

Silly US of A.

(Yeah, having to add VAT to all the prices when I was in Los Angeles back in 2007 was annoying.)

I've lived in California my whole life and so I've already been paying for sales taxes for all my internet purchases online already. I really can't think of many places that I buy online that doesn't charge me a sales tax aside from Valve's steam service and other game applications.

Every conventional store I've always paid a sales tax. From newegg to amazon.

I really don't see how this is different. Maybe I need to read the legislation.

EDIT: Upon reading Game Politics article, it has yet to pass the State Senate. To quote that article for a second.

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.

So it seems that as long as the company is residing in the state they must have sales tax. So if it passes it pretty much enforces a law that just hasn't been strongly enforced. So for this california resident, and the places I shop online, I've already been following this law.

I hope this doesn't mess up E-bay. It also means that if this goes up on certain sites I simply won't use them.

Isn't this inevitable anyway? Some people predict retail in America will be almost entirely online a decade or two from now.

How exactly would such a tax work? would they just demand a set amount of money from Amazon and other retailers each year? and whats to stop the retailers from simply refusing to delivering to address's in California?

I'm curious about how exactly they propose to enforce this. Suppose i'm a retail shop in Delaware who occasionally ships to a California address. How do they plan to verify compliance, and in the event I simply refuse to collect their tax, what recourse do they have? California authorities have no jurisdiction and Federal officers have no grounds to become involved since no federal laws have been broken. Besides, somebody might succeed in getting the whole law thrown out on the grounds that it is a state attempt to regulate interstate commerce, which is an exclusively Federal province.

So, I'm of the opinion that they're largely wasting their time.

Simply put, fuck.

Quick question - does this mean that all Californians that buy something off of Amazon will be taxed, or does this mean that if I buy something off of Amazon that is being shipped from California, I'll be taxed?

I love living in Oregon.

No sales tax here :D

Although they compensate by having really high property taxes and income tax. *sigh*

Why don't we just tax email spam?

We'd be solved of all ecomonical problems in a day!

"Yeah, I like the stuff the government does for me so long as I don't have to pay for any of it."

Isn't that what everyone would really like?

I had no idea I was supposed to be claiming sales taxes on my returns if I bought stuff online. Damn, I guess that makes me a tax dodger or something. Oh well, I'm all for it unless of course this now means I'll be paying California a sales tax instead of my state when buying stuff online, then we have a problem. Something like this seems like it should be done at the federal level.

Doubtful this will work if passed California would have to verify any online sales to the state and then collect from the appropriate business if this passes I could see a lot of places not wanting to deal with the hassle and just not shipping to California.

I had to pay amazon tax anyways. They're based in my state.

This doesn't even make sense.
I assumed that when I bought something from someone at location A, I was paying for what they deemed a worthy price, and then I'd pay shipping. That would include the product, them packaging it, shipping it to me, and me opening it.
I'm guessing that the tax would apply to the product price?
What about stuff that moves through California? Is there going to be tax applied to my lolcat shirt if it has to move through Cali?
What about availability? Will I suddenly have to pay more if my lolcat shirt isn't available at the Colorado location, but is available in Cali?
And why the tax in the first place? They aren't providing any more services than they have in the past. And the government doesn't own the fucking internet. Hell, they have a tough enough time regulating their own sites.

This stinks of stupidity, and I hope it hits a legal brick wall.

this happens in the uk already :). on pretty much everything :)

newegg.com! Oh no!

Wait are you kidding me? You seriously mean that online companies in the US dont actually charge taxes? That is actually pretty screwed up that you guys didnt already have something like this in place at a federal level, your tax collecters must really suck.

In Canada if your business makes more then $30,000 a year you legaly have to charge people the appropriate sales taxes regardless of how the sale was made. It doesnt matter if you are amazon, some other similar site or even just a random smuck who makes his money off ebay. You make the sale then you charge the taxes and send it to the government. You dont then your ass is going to get audited and you will have to pay it all anyways plus a large fine.

So there is something that republicans and I agree upon. The internet should be a sacred neutral land. I'm not sure how well this is going over with people.

As someone who has studied tax law, you are taxed on whatever gain in wealth you achieve. For retailers, they gain wealth by selling products. Online retailers have been avoiding this problem for years. By forcing online retailers to pay taxes that will mean they will have to start transferring the costs over to the consumer or risk losing profit. Sorry people, this was going to happen sooner or later. Might as well happen now

Wait...I thought there already was an internet tax in California. Everytime I buy something online, it charges me extra for a California tax.

This already happens in some states like IL, I'm always peeved when I buy something from like Direct 2 Drive and I'm like oh wow I'm getting such a deal with a 10% off code, lol nope, it comes out to the same price as steam because of the stupid 10% tax.

Cipher1:
How exactly would such a tax work? would they just demand a set amount of money from Amazon and other retailers each year? and whats to stop the retailers from simply refusing to delivering to address's in California?

It will work in the same way that they collect the tax from physical retailers, You pay sales tax on anything that's sold its simple and all big online retailers already have this built in for other countries that have national sales tax. What's to stop they simply refusing to deliver to address's in California? Well if 9.25% tax rate is going to raise $1 billion that means online sales are worth $9.25 billion, not many business is going to walk away from that.

Doesn't California already have insanely high taxes already? From sales tax to property tax? They also have the highest population of any state. Hmmm...wouldn't that mean they are currently bringing in tons of revenue?

I know! How about they stop spending so much fucking money!

Wow, just this once i guess i'm on the side of the Republicans, who'da thought it?

Does California just hate computers? It's always the Golden State that seem to be cracking down on it.

Lord Inglip adds to infest trevol.

Ahh California and your taxes. You are the reason I am a republican(when it comes to economics).

I really need to read that series...

Edit: Stupid double post...

They don't already? Seems like something that should have been done a long time ago.

It's pretty shocking, but most states have not only a sales tax, they expand it to call it a use tax, which sounds just like what it is. You might have bought that item in a different state and paid sales tax on it there, but when you bring it back to a state with a use tax, you're supposed to print out a form, fill it out and mail it in with the sales/use tax.

Needless to say, I'd be surprised if they process many of those forms, but the law exists so that the state -can- come after a company or an individual if they need to, but it's so grossly unenforced that most people don't even know their state has one.

I use Amazon all the time and I like not having to pay sales tax (even though I actually do, since I'm supposed to report it, but like 99.99% of all people, I don't), but I do wonder how Amazon hopes to get away with having a very real and clear business presence in a state and somehow claim that they don't have to collect sales tax like the Barnes & Noble or Best Buy does.

I hope this brings up a wider discussion about why we have sales taxes and what they should be, since they tend to hover close to 8-10% in most jurisdictions in the states, but the idea that Amazon can operate a warehouse in a state and claim it's run by an affiliate (who happens to share the same address as Amazon itself) and avoid taxes just doesn't pass the smell test.

I had to actually go look at the bill itself because that NBC story did such a piss poor job of actually describing what the bill does, and it would appear to only go after online companies that are otherwise said to have a business presence in the state, and broadening that definition to include other entities that are part of a common group under the control of that business. It's because Amazon tries to make the rather ridiculous claim that it's not really doing business there, just its affiliates, even though it controls those affiliates.

If Amazon can do it, could Best Buy just have Internet Kiosks outside their stores that people could use to buy something, and then walk in and pick it up? Or order online from home, pay no tax and then drive over and pick it up? Maybe the real answer is making the penalties for failure to self-report sales/use tax more serious.

I'd rather pay less taxes like most people, but I also want a level playing field for businesses that are supposed to be operating under the same laws.

The funny thing to me is that Hollywood is in California because they wanted to use light bulbs, but not have to pay Edison. Thus they went to a place where the law did not apply.

OT: Who wants to bet that these places will do less business in states where they are charged more? It's simple economics. Glad I don't live in California. They could try, you know, spending less.

IT was a matter of time...

Be reall

Colorado attempted something like this--granted only on one service, not on all internet purchases, and Amazon promptly stopped offering that service in Colorado. All that's going to happen is that companies will start charging residents of California sales tax on their online purchases. Or those with more sense may simply stop shipping to California. I'd actually encourage online retailers to boycott the entire state outright. California has been trying all kinds of massively shady tactics lately to squeeze money out of people. They've been declaring people's safe-deposit boxes "abandoned" and looting them, too. You know what they really need to do? BALANCE THEIR BUDGET. Even if this means cutting "services" across the board.

we really need to just dump the sales tax and go with an income tax, sales tax tends to get most from the poor, income tax will get most from the rich and frankly fuck the rich

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