Skip to comments.California's plan to tax online sales hits a bump
Posted on 06/18/2011 9:43:35 AM PDT by SmithL
California lawmakers have taken another run at taxing online shopping, setting up a major confrontation with online retailers like Amazon.com.
The Legislature this week approved a bill that would force Amazon and many other out-of-state Internet retailers to collect tax on goods sold to Californians.
The Board of Equalization estimates the legislation could produce as much as $317 million a year in additional tax revenue.
Still, backers insist it's not about the money; it's about being fair. The bill would force e-commerce retailers to charge the same taxes collected by their brick-and-mortar competitors.
"We're finally on the way to creating a level playing field for California companies," said Sen. Loni Hancock, D-Berkeley, who has helped lead the effort.
It's not clear if the bill will become law. It was part of the budget package approved Wednesday by the Legislature. Gov. Jerry Brown vetoed the main budget bill Thursday, and on Friday legislative staff members were determining whether the sales tax bill can still be legally sent to the governor separate from the budget, or whether lawmakers will need to vote on it again.
Brown told reporters in Los Angeles he believes the Internet tax is a "common sense idea."
If he does sign the Internet bill, California could be in for a fight. Amazon and Overstock.com have threatened to sever ties with their California "affiliates" thousands of businesses that earn commissions by referring customers to Amazon.
Amazon, probably the most aggressive opponent of the legislation, has already fired affiliates in several other states over similar laws, including two last week: Connecticut and Arkansas. It had no comment on this week's developments in California.
(Excerpt) Read more at sacbee.com ...
Not about the money, eh? Ok -- then don't tax the brick-and-mortars either! That's also "fair"...
If their lips are moving, they're lying...
How eloquent a way to say "We're finally on the way to sucking any remaining life that still exists in the California economy by even more taxing and making you feel good about it"!
Amazon is not a California company and they have no business locations in the state.
What does the Constitution say about this?
No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress
The non-taxable status of online sales has worked very well. Other states have sought to alleviate their bankrupt budget woes by going after internet sales without much success. California won’t fare any better.
Would this mean if I buy from a Californai shop online I have to pay their taxes? if so then I will be skipping the quilt shops online that are located in California.
Californians may find themselves excluded from access to many online businesses like Tennesee.
The Liberals in CA would tax your bedroom if they could get a meter installed.
So If I sell a californian a product through E-Bay (A San Jose Company), am I on the hook to collect sales taxes for the State of California even though I live in the no sales tax State of New Hampshire?
If I have a disagreement with the assessment, am I no subject to California Judicial Review?
These are not “Imposts or Duties on Imports or Exports”- they are the same taxes charged on goods from in-state.
Per a court ruling taxes are paid according to the location of the seller, but that can change.
I’d love to tell California, “I don’t have a business presence in your state” and add with language not suitable for posting here where they can take their state laws.
Also, CA has no problem when its own merchants who have no business presence in other states don’t charge sales tax.
One state cannot force the citizens of another state to collect taxes on behalf of a state to which they are neither citizens nor residents. Amazon is located solely in a state which has no sales tax. California cannot require that Amazon act as it's agent for the collection of taxes nor can California charge a duty on goods imported into California.
The Constitution is quite clear on this subject. Indeed if California were to collect the tax from the citizens of another state for the sale of goods imported into California, then by the terms of the Constitution the moneys collected must be turned over to the US Treasury.
That would be a tax on interstate commerce.
(fire suit on - now let the idiot statist tax fans flame me)
If moon beam said it, you can bet that there is no "common sense" anywhere near it.
I thought that Amazon was located in Seattle, Washington and the last time I was in the state I paid sales tax. Has this changed?
“California cannot require that Amazon act as it’s agent for the collection of taxes ...”
Unless it has a ‘physical’ presence in the state- per SC ruling.
The SC ruling a virtual retailer has a ‘physical presence’ in a browser in a state would be logical and consistent. The purchase physically takes place in the customer’s browser.
Since the ‘online store’ is in a browser on a computer physically in-state, then the retailer operating it can be subject to state law. Making the Constitutional “imposts” argument a red herring, it’s the location of the sale that matters.
Anyway, I expect the court to follow that reasoning. .
In another 25 years business practises will change and it will rule something else...
From Scalia’s concurrance in Quill:
“...the “physical presence” rule established in Bellas Hess is not “unworkable,” Patterson, supra, at 173; to the contrary, whatever else may be the substantive pros and cons of the rule, the “bright line” regime that it establishes, see ante, at 15-16, is unqualifiedly in its favor. Justice White’s concern that reaffirmance of Bellas Hess will lead to a flurry of litigation over the meaning of “physical presence,” see post, at 10, seems to me contradicted by 25 years of experience under the decision.”
Hope it helps show why I look at this the way I do- as ‘litigation over the meaning of “physical presence,”’.
If that is the case, then Amazon owes the State of Washington a boatload of back taxes.
The online store is located where the seller's server is located. I am just "remotely viewing" their shelves.
You may be on to something....an editorial from The Seattle Times (February 15, 2011):
"AMAZON.COM is a neighbor of ours it is right across the street from The Seattle Times and is one of our state's most successful creators of wealth and jobs. We wish Amazon and its people well, but we cannot support the company's campaign to dodge the payment of state sales tax all across America."