California's plan to tax online sales hits a bump

Sacramento Bee ^ | 6/18/11 | Dale Kasler

[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.

[Brandonmark]

If that is the case, then Amazon owes the State of Washington a boatload of back taxes.

You may be on to something....an editorial from The Seattle Times (February 15, 2011):

Amazon should stop dodging state sales taxes

"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."