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California Assembly Approves Internet Tax

samzenpus posted more than 3 years ago | from the tax-man-cometh dept.

The Internet 454

ClientNine writes "California could collect more than $1 billion a year by taxing Amazon and other online retailers if a bill approved by the Assembly becomes law. Assemblyman Charles Calderon, a Democrat from Whittier, says his legislation doesn't impose a new sales tax, but extends one that California should already have been enforcing. AB155 passed, 47-16, with the support of one GOP lawmaker Tuesday. It now heads to the Senate. Other Republicans rejected the bill because they said it would invite lawsuits, drive business out of California, and get the state entangled in the messy task of regulating the Internet."

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I guess I just won't buy stuff online anymore. (2)

Senes (928228) | more than 3 years ago | (#36313346)

Can anyone recommend a few states where these taxes are unlikely, preferably also a place where I have multiple choices of ISP?

Re:I guess I just won't buy stuff online anymore. (1)

OS24Ever (245667) | more than 3 years ago | (#36313366)

oregon has no sales tax.

Re:I guess I just won't buy stuff online anymore. (2)

baldass_newbie (136609) | more than 3 years ago | (#36313424)

oregon has no sales tax.

But Texas has jobs [star-telegram.com] .

Re:I guess I just won't buy stuff online anymore. (1)

magarity (164372) | more than 3 years ago | (#36313498)

oregon has no sales tax.

But Texas has jobs [star-telegram.com] .

But Texas has no Amazon.com jobs [bloomberg.com] .

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313618)

I just got informed from VUDU that Texas wants to collect Sales Taxes for online purchases. so i guess texas is off the list.

Re:I guess I just won't buy stuff online anymore. (1)

Anonymous Coward | more than 3 years ago | (#36313762)

I just got informed from VUDU that Texas wants to collect Sales Taxes for online purchases. so i guess texas is off the list.

I wouldn't worry about it too much. The legislature's regular session has ended and it's unlikely that a tax increase will be brought up in a special session, since the governor sets the agenda as to what issues may be addressed in a special session.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313906)

Yeah, but Texas has no income tax, and housing is affordable.
But you do have to put up with 2 groups of jerks:
    a sizable portion of the texas population (and even a bigger chunk of elected/appointed officials)
    the rest of the country who constantly trys to put *everyone* in texas in that group

I would like to invite Amazon... (5, Insightful)

fyngyrz (762201) | more than 3 years ago | (#36313580)

...to move to Montana. No sales taxes. Low land costs. Lots of people looking for work. Plenty of inexpensive flat space for shipping and warehousing operations, also direct railroad and highway access in many candidate areas. Also, Montana operates with a balanced budget, so it doesn't get into the type of fiscal trouble that California repeatedly does and then try to "fix" it by continuously increasing the tax burden on the citizens.

Re:I would like to invite Amazon... (2, Insightful)

0123456 (636235) | more than 3 years ago | (#36313884)

Of course after all the Californians move there it won't be a low tax, low regulation state for long.

Re:I guess I just won't buy stuff online anymore. (0, Troll)

Anonymous Coward | more than 3 years ago | (#36313676)

oregon has no sales tax. But Texas has jobs And lots of mindless douche bags who want to tell me how to think, educate my child, and live my life. Thanks, I'll take my chances with Oregon. Less douchey in general.

Re:I guess I just won't buy stuff online anymore. (0, Troll)

Prosthetic_Lips (971097) | more than 3 years ago | (#36313738)

I think you have your states mixed up -- more "militant vegans" and those types wanting to nanny me in the northwest than in Texas. Texas just wants to teach all facets of the evolution / creation / whatever debate.

No, I don't live in Texas.

Re:I guess I just won't buy stuff online anymore. (2)

AK Marc (707885) | more than 3 years ago | (#36313924)

There is no "debate" about evolution / creation. Forcing religion to be taught in public school as science is much more douchery than what you get from the vegans.

And pretending that there is some debate when there isn't is very "fair and balanced" of you. Equal time to all the crackpots, right?

Re:I guess I just won't buy stuff online anymore. (1)

thebasa (1626395) | more than 3 years ago | (#36313478)

shhhh don't tell anyone. they might all move here. fat chance getting away from comcast if you're near the city though. you could try clear if you live in a place with paper mache walls maybe. only the 'burbs are pimpin' that fiber large-scale

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313608)

Stop telling people or more will start emigrating. There's enough ex-pat Californians ruining the roads in Oregon as it is.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313432)

China?

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313446)

Alaska, Delaware, Montana, New Hampshire, Oregon

Re:I guess I just won't buy stuff online anymore. (2)

interkin3tic (1469267) | more than 3 years ago | (#36313448)

Can anyone recommend a few states where these taxes are unlikely

Unlikely for how long exactly? There are states that don't have it at the moment, but whether it will stay that way long enough to make moving there worth it seems dependent on how much you buy online and how likely the legislators of that state are to realize that you can buy things on these newfangled tubes.

While I like not paying taxes on purchases, and recognize that in practice it might be impossible to enforce on -all- web transactions, I can't think of a good reason why online purchases SHOULD be exempt while things you buy in a store should have the tax.

Re:I guess I just won't buy stuff online anymore. (1)

dingen (958134) | more than 3 years ago | (#36313456)

Why do you care? Are you running Amazon or another online retailer?

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313548)

one of the more ignorant statements I've seen here lately, and that is actually quite impressive.

Re:I guess I just won't buy stuff online anymore. (2)

Dahamma (304068) | more than 3 years ago | (#36313556)

The bill affects Californians buying products from out-of-state products. It only affects the retailers in that they no longer get unfair competition vs. businesses located *in* California. Sales tax is paid by the buyer - it's just usually collected by the seller, since the buyer can't be trusted to pay it. CA has always taxed these purchases and buyers are supposed to report their purchases, it just hasn't had a way of enforcing it...

Re:I guess I just won't buy stuff online anymore. (1)

hedwards (940851) | more than 3 years ago | (#36313932)

It's not just a matter of trust, the stores aren't required to report the sales to the state, the consumers are unlikely to know how and where to pay the taxes they owe. It's been my feeling for some time that it's ridiculous to expect customers to collect and pay the taxes as we're not given any particularly efficient way to do it and there isn't any actual enforcement of the law anyways.

Re:I guess I just won't buy stuff online anymore. (0)

Man On Pink Corner (1089867) | more than 3 years ago | (#36313486)

Cue the statists: "Don't like taxes? Move your business to Somalia! Hyuck, hyuck, derp.."

Re:I guess I just won't buy stuff online anymore. (3, Insightful)

blair1q (305137) | more than 3 years ago | (#36313528)

They're not wrong.

When you say you don't like taxes you say you think corporate America can provide everything you need cheaper.

Ever really think about that possibility?

Re:I guess I just won't buy stuff online anymore. (3, Funny)

spun (1352) | more than 3 years ago | (#36313598)

How dare you malign the Holy Free Market and its divine prophets, the Corporations. If we just get government off their backs, these angelic entities will provide us with lucrative jobs and cheap products instead of doing what they do now, which is rape us, rob us, and invest all the money they stole from us in jobs overseas. I know this is true because they paid people to tell me so.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313700)

Your sarcasm fails to impress, because corporations are not a free market creation, but a government one.

Re:I guess I just won't buy stuff online anymore. (3, Informative)

spun (1352) | more than 3 years ago | (#36313880)

And the power they have amassed would just go away if the government did? Fat. Fucking. Chance. Tell you what, go back to the fifteen hundreds and tell the Dutch that corporations are a bad idea.

The thing is, without the government, corporations would have MORE power, as there would be no one to limit their power. Right now, government is a check on corporate power. Get rid of government, and corporations won't go away. Who will make them? Who will say that what they are doing, and the way they are organized, is wrong or illegal? No one. You think it takes a government to make a corporation? How so? Without government, we wouldn't even have the limits that are set by a corporate charter. You don't need a government to have corporations. All governments do is LIMIT corporations, not create them. What do you think corporate law is? You don't get rid of corporations by getting rid of the laws which govern them.

Welcome to the idiocy of libertarianism, where consequences don't matter because we all have free will and personal responsibility and we just need to believe real hard and clap our hands together and tinker bell will come back to life.

Re:I guess I just won't buy stuff online anymore. (3, Interesting)

jhoegl (638955) | more than 3 years ago | (#36313614)

Yeah, and I laughed.
Considering the history of business in the world I know for a fact that without regulation, rules, and governance those corporations will steal, poison and murder to make more money.
So why not allow the government to do it? We have more control over them than we do businesses.

Re:I guess I just won't buy stuff online anymore. (1)

Anonymous Coward | more than 3 years ago | (#36313834)

But if you don't like the services of the government you have no real alternative. If you don't like the services of company_a you can try company_b, company_c, company_d, company_e. Assuming true competition, which will never occur with government provided services.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313956)

Assuming true competition, which will never occur with government provided services.

Riiiight. That's something corporations excel at, creating "true competition", Mr. apologist. I mean, It's everywhere, and getting better all the time- Why, look at our healthcare insurance choices, our telecom and ISP choices, etc.

Re:I guess I just won't buy stuff online anymore. (1)

aztracker1 (702135) | more than 3 years ago | (#36313896)

The larger issue is that the amount of taxes collected, vs. the amount spent on corporate oversight is insanely small... there's very little, or no need to increase sales taxes to cover this need. Most states with sales taxes have their own IRS equivalent capable of taking on the issue of actually collecting taxes. This burden in the end will fall to the tax payers. I don't think anyone is suggesting that there be no oversight, only that there is too much taxation, and far to much government encroachment into the liberties of its' citizens.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313600)

All real Americans are statists, you child.

Re:I guess I just won't buy stuff online anymore. (3, Informative)

blair1q (305137) | more than 3 years ago | (#36313640)

If you don't want to be a statist, move to Somalia.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313606)

Please stop complaining, pay the taxes and see that they return to you in the form of services.

Re:I guess I just won't buy stuff online anymore. (0)

Anonymous Coward | more than 3 years ago | (#36313654)

services like the DEA?

Re:I guess I just won't buy stuff online anymore. (1)

Rozzin (9910) | more than 3 years ago | (#36313780)

Can anyone recommend a few states where these taxes are unlikely, preferably also a place where I have multiple choices of ISP?

New Hampshire [freestateproject.org] .

Stupid Move (1)

binary-zero (2022962) | more than 3 years ago | (#36313360)

but again this is coming out of CA ... business would be driven out of the state very soon as investors only care about money.

Re:Stupid Move (5, Funny)

VortexCortex (1117377) | more than 3 years ago | (#36313440)

"We're Broke, what should we do?!"

"Hmm, how about we 'extend' taxes online and piss off silicone valley?"

"OK, we'll extend the taxes, but you are not urinating on my tits!"

Re:Stupid Move (1)

macraig (621737) | more than 3 years ago | (#36313514)

Silicone Valley: home of the original breast implant.

Re:Stupid Move (4, Funny)

sarysa (1089739) | more than 3 years ago | (#36313520)

"Hmm, how about we 'extend' taxes online and piss off silicone valley?"

Silicon Valley.

Silicone Valley encompasses Hollywood, Beverly Hills, and Orange County.

Re:Stupid Move (1)

jhoegl (638955) | more than 3 years ago | (#36313638)

So, its not the deep crevasse between the boobs?

Re:Stupid Move (0)

Anonymous Coward | more than 3 years ago | (#36313714)

So, its not the deep crevasse between the boobs?

Only the fake ones

Re:Stupid Move (1)

Anonymous Coward | more than 3 years ago | (#36313470)

In Illinois now we have to declare what we purchased online without Illinois sales tax, and pay a "use tax" that is equivalent to the sales tax... I wonder how many people are declaring/paying this? :rolleyes:

Re:Stupid Move (2)

interkin3tic (1469267) | more than 3 years ago | (#36313530)

business would be driven out of the state very soon as investors only care about money.

I'd need to see some data before I'd conclude that was inevitable. There are already higher taxes here, cost of living is higher here and consequently worker salaries have got to be pushed up. It doesn't seem to me that you've done the calculations to where you can conclude that staying in California and paying these taxes would cost the companies more than it would to relocate somewhere else that would likely pass an internet tax sooner or later. Nor do I believe that you have a good reason why these companies wouldn't just pass off the costs to consumers, as they do with any other sales tax.

On the other hand, I'm MORE certain the idiots in Sacramento haven't done a proper analysis of it either...

Re:Stupid Move (1)

element-o.p. (939033) | more than 3 years ago | (#36313826)

Nor do I believe that you have a good reason why these companies wouldn't just pass off the costs to consumers, as they do with any other sales tax.

Because if I, as an Internet-savvy consumer, go to the web site of company X (located in California), get to the check-out portion of the web site and see sales tax added to my purchase, I will quickly bail out of the order, go to the web site of company Y (NOT located in California) and purchase my products there. I highly doubt I would be alone in doing this, and consequently, company X will soon face an unpleasant reality: relocate to a state that doesn't make such asinine rules or lose their business to company Y.

Re:Stupid Move (1, Informative)

SwedishPenguin (1035756) | more than 3 years ago | (#36313624)

But what are they supposed to do? They're broke and raising taxes is apparently taboo over there, there's a limit to how much spending you can cut without severely impacting government services. Why should goods purchased over the Internet be exempt from taxes when goods purchased in a brick and mortar shop is not? Within the EU, we pay VAT in the country where the store is based, for goods purchased outside the EU, local VAT is imposed as part of import duties.

This is a non-event for those who paid taxes (3, Informative)

Anonymous Coward | more than 3 years ago | (#36313444)

So this is effectively the Use Tax which everyone was already supposed to be paying.

The usual suspects up in arms complaining about this are likely doing so because they were previously dodging taxes by not properly including their purchases on their tax returns.

Re:This is a non-event for those who paid taxes (1)

RobDude (1123541) | more than 3 years ago | (#36313492)

Exactly. Everyone loves to cheat on their taxes.

Re:This is a non-event for those who paid taxes (1)

SETIGuy (33768) | more than 3 years ago | (#36313858)

Everyone loves to cheat on their taxes.

That's what people who cheat on their taxes say to make themselves feel better.

Re:This is a non-event for those who paid taxes (5, Insightful)

brainboyz (114458) | more than 3 years ago | (#36313536)

Except they're now forcing businesses in other states to collect and remit taxes for items sold to Californians. This should be interesting because they're creating an interstate commerce tax which should normally be the jurisdiction of the Feds. Given the Feds got bent out of shape about Arizona doing the same with immigration, they either have to push a double-standard, or correct California's overstepping of authority.

Re:This is a non-event for those who paid taxes (1)

Anonymous Coward | more than 3 years ago | (#36313634)

Except they're now forcing businesses in other states to collect and remit taxes for items sold to Californians. This should be interesting because they're creating an interstate commerce tax which should normally be the jurisdiction of the Feds.

It is the jurisdiction of the Feds. There is already a Supreme Court decision saying that states cannot force mail-order businesses with no point of presence in a state to act as collection agents for sales/use taxes on goods sold to residents of that state. Last time I checked, Supreme Court decisions supersede state laws.

Re:This is a non-event for those who paid taxes (1)

iluvcapra (782887) | more than 3 years ago | (#36313650)

Catalogues have been collecting several state's sales taxes for years -- any state they have a business presence in. Saying that this is an "interstate sales tax" is like saying that the sales tax you paid on your factory-customized Chrysler is an international sales tax because it was shipped from Brampton, Ontario. The fact that in one case you meet someone face-to-face (the dealer) in your state that makes the deal and you don't in the other makes no difference from the perspective of your tax obligation.

Re:This is a non-event for those who paid taxes (0)

Anonymous Coward | more than 3 years ago | (#36313682)

Just pass a nationwide sales tax and remit the proceeds to the states. Problem solved.

Re:This is a non-event for those who paid taxes (1)

OverlordQ (264228) | more than 3 years ago | (#36313716)

Except they're now forcing businesses in other states to collect and remit taxes for items sold to Californians.

No they're not. They're only collecting taxes from online companies with a physical presence in California.

FTFB:

This bill would revise the definition of "retailer engaged in
business in this state" to mean any retailer that has a substantial
nexus with this state for purposes of the commerce clause of the
United States Constitution and any retailer upon which federal law
permits this state to impose a use tax collection duty.

Re:This is a non-event for those who paid taxes (2)

im_thatoneguy (819432) | more than 3 years ago | (#36313656)

I like this quote.

"Get the state entangled in the messy task of regulating the Internet."

In other words the messy task of... governing. Welcome to government. Your job as a legislator is to solve the messy problems of regulating business, commerce and citizens.

Re:This is a non-event for those who paid taxes (0)

Anonymous Coward | more than 3 years ago | (#36313722)

So this is effectively the Use Tax which everyone was already supposed to be paying.

The usual suspects up in arms complaining about this are likely doing so because they were previously dodging taxes by not properly including their purchases on their tax returns.

So wait... Does that mean prior to/without this I would've had to file taxes in CA despite the fact that I'm the resident of another state (here on military orders)? What if I was living on base, where as far as I can tell is completely not within the state's regulations (as far as taxes anyway).

Won't someone please think of the Airmen (and Soldiers, Marines and Seamen)?

Re:This is a non-event for those who paid taxes (1)

SETIGuy (33768) | more than 3 years ago | (#36313920)

The tax requirements for members of the armed forces differ from those of other residents, so I can't tell you. If you didn't file a California tax return, you probably don't owe use tax. If you worked for a company and were sent to work at a California branch for several months, California Income Tax would have been deducted from your pay, you would have been subject to use tax for any untaxed out of state purchases that you primarily use in California, and you would have been required to file a California Non-Resident Tax return.

Re:This is a non-event for those who paid taxes (1)

SETIGuy (33768) | more than 3 years ago | (#36313846)

Yes, prior to this, California had a tax on honesty.

nice (-1, Troll)

Anonymous Coward | more than 3 years ago | (#36313508)

only a dem would think to raise taxes instead of cut spending...and NO I do not believe what he says when he says we already should have been enforcing this. This is typical stupid shit asshole moves by typical dumbass dems. Textbook tax hike: find something to justify a tax and tax the shit out of it until we can find and tax something else and justify that. So why now shop on the internet? Personally I never wanted commerce on the net but what the hell do I know.

Re:nice (3, Informative)

Ruke (857276) | more than 3 years ago | (#36313668)

Some of us like the services that the government provides. While I'm generally more in favor of a progressive income, capital gains, or property tax, I'm okay with a sales tax if it means paying for schools, police, and buses.

Re:nice (0)

Anonymous Coward | more than 3 years ago | (#36313704)

only a rep would think to lower taxes instead of cut spending...and YES I do believe what he says when he says we already should have been enforcing this. This is typical stupid shit asshole moves by typical dumbass reps.

*cough* Reagen's administration would be increasing taxes. Reagen must be an asshole dem. This proper use of sales tax (which most states have) is usually ignored by the customers, so now they are just enforcing it.

Collect 1B a year? (1)

nurb432 (527695) | more than 3 years ago | (#36313510)

Sure they will.. They might lose that much however, as companies move out of state and leave people unemployed.

Re:Collect 1B a year? (4, Insightful)

interkin3tic (1469267) | more than 3 years ago | (#36313578)

They might lose that much however, as companies move out of state and leave people unemployed.

Maybe, but there are teachers, school employees, government workers, law enforcement, and a large number of other people working on tax dollars that are definitely facing unemployment too due to the budget shortcomings. The legislature should ideally weigh the harms of that against the potential disadvantages of actually collecting a tax they said they were going to tax and those companies should have been budgeting for in the first place...

But of course I'm not even fooling myself, this WILL BE decided based on lobbyists and how willing we voters are to believe that all taxes are evil things that only hurt us.

Re:Collect 1B a year? (1)

cdrudge (68377) | more than 3 years ago | (#36313782)

The legislature should ideally weigh the harms of that against the potential disadvantages of actually collecting a tax they said they were going to tax and those companies should have been budgeting for in the first place...

This is only for sales/use tax. Retail companies don't budget for it...it's passed on directly to the consumer in almost all cases, or wrapped up in the price for where it's not a line item.

By having to collect a tax, it puts an online retailer at a disadvantage over other retailers that aren't obligated to collect the tax. In the end it shouldn't matter as most (all?) state that has a sales tax requires you to pay the equivalent in use tax for out of state purchases that weren't taxed. But in reality almost no one does.

Companies like Amazon say they don't have a nexus or presence in the state. Specifically, Amazon for instance says they only have a California-based marketing relationship. Being out of state, the SCOTUS has ruled that they are not obligated to collect sales tax for California-based purchasers. However California disagrees and is trying to change their laws so that Amazon is included. The battle basically comes down to is how is a nexus defined?

Re:Collect 1B a year? (3, Informative)

cdrudge (68377) | more than 3 years ago | (#36313684)

Why would they leave? Tax is only being collected on purchases of in state companies to in state residents and that's up for debate. Products going out of state from California businesses aren't taxed unless the business has a nexus in the destination state, and that's not up for debate either. Only out of state businesses without a nexus in California are not required to collect sales/use tax for California, and that's the issue.

It's the last sentence that California is trying to change. Amazon for instance says they only have an advertising relationship in the state (e.g. they use a Ca-based marketing agency, buy ads, etc), no actual physical presence. Even if this gets passed and signed into law, it surely will be challenged as being unconstitutional, going against the interstate commerce clause.

Moving out of state really doesn't change anything for existing businesses. The only ones really affected are out of state businesses that feel they don't have an in-state presence, but California feels they do.

Please select your state! (0)

Anonymous Coward | more than 3 years ago | (#36313512)

CA residents are excluded. Go buy from someone else.

We don't want your business. Piss off.
Don't like it? Contact your politicans.

Taxation (1, Insightful)

macraig (621737) | more than 3 years ago | (#36313538)

Once upon a time taxes got us a Revolution. Now they just get us pissy and twittery.

Representation (4, Informative)

betterunixthanunix (980855) | more than 3 years ago | (#36313582)

The people of California voted for the representatives who approved this tax.

Re:Taxation (1)

Anonymous Coward | more than 3 years ago | (#36313588)

Once upon a time taxes got us a Revolution. Now they just get us pissy and twittery.

Once upon a time taxes without representation got us a Revolution. Now they just get us an fast-paced, public dialog about whether such taxes are appropriate followed by an election cycle in which we may express the collective decision.

Re:Taxation (4, Insightful)

interkin3tic (1469267) | more than 3 years ago | (#36313610)

No, it was the lack of representation that got us a revolution. They didn't have cable news back then: no one was dumb enough to believe that the new country would run without any taxes of any kind.

Re:Taxation (1)

iluvcapra (782887) | more than 3 years ago | (#36313678)

Now they just get us pissy and twittery.

This time around we have representation. And we dare not vote the current people out of office, lest the madmen on the other side of the isle take control.

Re:Taxation (1)

sconeu (64226) | more than 3 years ago | (#36313776)

This time around we have representation

And it's the best representation money can buy!!!

Re:Taxation (1)

SnarfQuest (469614) | more than 3 years ago | (#36313842)

What's interesting is the tax rate that caused the revolution. And today we are being charged a lot more than that rate.

News just in: Internet biz departs Calif. (1)

Anonymous Coward | more than 3 years ago | (#36313558)

News Just In: 50 online internet companies have signalled that they are going to leave California at the earliest possible opportunity. "We continually strive to drive down costs to remain competitive against other online retailers and more conventional sales outlets", reported one CXO. "We have opted to move our headquarters to another state, and will if necessary, move to another country where we don't have these taxes". The move heralds the loss of 3000 IT workers at that company alone, and what is expected to be the loss of some 15000-18000 jobs in the state. State legislators failed to note that in an online world, presence on the internet can be physically anywhere there is an internet connection. State legislators didn't have any comments with regards to the news, but state and local IT people had plenty to say, none of which can be published.

Re:News just in: Internet biz departs Calif. (0)

Anonymous Coward | more than 3 years ago | (#36313758)

In related news, an informal poll shows that online forum-goers are increasingly inventing hyperbolic "press releases" in order to give a false sense of legitimacy to their otherwise unsupported opinions. By including specific numbers and figures, which industry experts are terming "Wild-Assed Guesses" (WAGs), they hope to provoke an unfounded sense of urgency in situations where the actual facts are insufficient. Will the American public be caught up by this new, online craze? That's up to you to decide!

Virtual goods (1)

sarysa (1089739) | more than 3 years ago | (#36313564)

The wording of all these "internet tax" articles are vague. Are virtual goods included in this mess?

Amazon and other internet-only vendors may yank their California offices, but nowhere in the U.S. are there more virtual goods manufacturers than in California, Bay Area specifically.

How can Cali tax a sale... (0)

Anonymous Coward | more than 3 years ago | (#36313570)

...that was made in another state? This is unpossible as this is out of their jurisdiction.

Re:How can Cali tax a sale... (1)

fyngyrz (762201) | more than 3 years ago | (#36313628)

"use taxes" -- read up on 'em.

Re:How can Cali tax a sale... (2)

jrj102 (87650) | more than 3 years ago | (#36313648)

...that was made in another state? This is unpossible as this is out of their jurisdiction.

California already taxes items purchased out of state, even by non-residents.

I moved to California in January. When I went to register my car, they said I had to pay sales tax on the purchase. "But I bought this car 8 months before I moved to California." Doesn't matter, they still said the tax was owed, about $3K worth.

Clearly illegal, but nobody is going to spend $100K in attorney/court fees to fight $3K worth of taxation. Welcome to the People's Republic of California.

Obviously we MUST do this! (1)

Medievalist (16032) | more than 3 years ago | (#36313590)

We must tax innovative businesses that have low profit margins heavily, so that the taxes will be passed on to the consumer.

Otherwise we'd have to tax the highly profitable entrenched industries (like, um, say OIL COMPANIES) that could easily absorb tax increases without raising consumer prices.

And THAT would be so unamerican it would surely cause the earth to fall out of its orbit and go careening into the sun!

Re:Obviously we MUST do this! (0, Insightful)

Anonymous Coward | more than 3 years ago | (#36313710)

http://money.msn.com/investing/fuel-shortages-hit-developing-world-jubak.aspx

Its working so well for Russia they closed down 700 gas stations in Altai, stopped running buses elsewhere because of rationing, and the average citizen can't fuel up his car.

If a liberal put a second of effort into the thought of repercussions for their actions we wouldn't have any liberals to screw up this country.

Ruining a good thing (4, Funny)

sqrt(2) (786011) | more than 3 years ago | (#36313602)

The internet is the one sphere of human interaction where libertarianism seems to actually work, and I think the only reason it took off was because it's been a lawless free for all. Since the barriers to entry are so low for much of the internet economy, competition is the closest to free and open that humans have ever achieved; nothing like the real world equivalent. We are slowly ruining it with bandwidth caps and shaping, laws to protect imaginary property, and taxation.

Re:Ruining a good thing (1)

Anonymous Coward | more than 3 years ago | (#36313872)

For those who need the synonym to be explicitly stated...

The internet is the one sphere of human interaction where CAPITALISM seems to actually work, and I think the only reason it took off was because it's been a lawless free for all. Since the barriers to entry are so low for much of the internet economy, competition is the closest to free and open that humans have ever achieved; nothing like the real world equivalent. We are slowly ruining it with bandwidth caps and shaping, laws to protect imaginary property, and taxation.

CAPITALISM : an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

I seem to recall... (1)

istartedi (132515) | more than 3 years ago | (#36313604)

I seem to recall having seen online ordering a number of years ago where state taxes were being collected. You'd go to a site and see, "Michigan resident add 5% sales tax". They'd sometimes even be smart about it and check your ZIP code.

Then, some people didn't do that. Amazon didn't do it either; but a lot of small places didn't do it. States didn't do anything about it, either because they were behind the curve on the Internet, or they were too busy debating about gay abortions and hemp-scented trigger locks.

California has been known to set trends. It'll be interesting to see what happens.

Re:I seem to recall... (1)

runningman24 (1172197) | more than 3 years ago | (#36313756)

Online retailers have usually only been doing that for states they had a physical presence in. I guess when both the seller and buyer are in the same state, it's simply a sales tax and not a "use tax" and remains the obligation of the seller to collect those taxes.

Re:I seem to recall... (0)

Anonymous Coward | more than 3 years ago | (#36313938)

They have always done that. Any company that has a physical presence in your State is required to collect sales tax on any sales made to residents of your state. I'm charged tax by any of Amazons partners that have presence in my State, it's nothing new.

VAT anyone? (-1)

Anonymous Coward | more than 3 years ago | (#36313662)

Lots of folks seems pissed off here, but in most of Europe we pay a VAT of around 19% of the goods value and we are certainly not broke for it (although certain countries are a bit broke for other reasons...). This has been like this since the first legal online sale and has not broken the intertubes...

Re:VAT anyone? (1)

element-o.p. (939033) | more than 3 years ago | (#36313944)

Yeah, but you see...we Yanks left Europe over 200 years ago specifically because we didn't *want* to be like you :)

Okay, that was a cheap shot (sorry) but while there is a lot in Europe that's pretty cool, an almost 20% sales tax certainly isn't one of them.

Good (0)

David Greene (463) | more than 3 years ago | (#36313686)

Hopefully this will spark a trend around the nation. Internet retailers have been subsidized by the public for too long. It's time for them to operate on a level playing field with everyone else. They use the infrastructure and services states supply; they should help pay for it.

Re:Good (1)

David Greene (463) | more than 3 years ago | (#36313964)

Troll? How interesting. Apparently the bar is set pretty low these days.

FFS, it's not an "internet tax"! (3, Informative)

sirwired (27582) | more than 3 years ago | (#36313694)

This is a requirement to enforce existing sales tax on merchandise shipped in from out of state.

Yes, it will primarily effect internet retailers (but will also affect mail and phone-order.) But it is not a tax on the internet itself, internet access, network traffic, or any other such thing.

I'll not get into a discussion in this comment as to if this is a good thing or not, but it pisses me off to see it referred to as an "internet tax."

Re: FFS, it's not an "internet tax"! (1)

EdwinFreed (1084059) | more than 3 years ago | (#36313978)

Exactly. If you buy something in California from out of state, the vendor doesn't charge you California sales tax, and you proceed to directly use that item, you are supposed to pay use tax. That's the law; if you're buying stuff from Amazon or wherever and not paying those use-taxes you are in violation. (And yes, this means a HUGE number of people are in violation, which is sort of the point.)

All this measure does is require that vendors like Amazon collect the tax instead. Since Amazon already does all sorts of order fulfillment in California and collects sales taxes when it does; this should be trivial for them to do at least.

Speaking as a California resident, I welcome this because right now keeping track of use-tax is a royal pain. In fact if anything I will be strongly inclined to prefer vendors that collect the tax because it saves me so much trouble.

As for counting on some sort of "only the feds can do this stuff" ruling so you can continue to break the law, this gets down to how what the lawyers call a jurisdictional nexus is defined. The bill appears to be tweaking that a little, but I doubt it's tweaking it enough for there to be constitutional issue. But IANAL, and even if I were, this is very deep stuff and you really need an expert's read on it.

Stupid! Stupid! Stupid! Just what we don't need! (0)

Anonymous Coward | more than 3 years ago | (#36313742)

Where are they getting this magical $1 billion figure? Yesterday's news stories where at $83 million. In reality it will be $0 because retailers like amazon will just cancel all affiliates in the state. This is the wrong type of tax at the wrong time. We need to invite more businesses into California not send them away.

The city I live in has offered several retailers (like Costco) an exemption from the cities portion of the sales tax in exchange for coming into the city and creating more jobs, this is the way to go. We get people from neighboring cities who shop here because it has more shopping stores and lower prices. Another city near us has a similar deal with a shopping mall.

A reduction in unemployment will help fill the state coffers better than an increase in taxes. I would rather have thousands of amazon affiliates earning money and bringing it into our local communities than this stupid law.

This is just another way for Charles Calderon to show his voters that he his helping the state and they should vote for him, while he is screwing the state of California. It's power & money hungry career politicians such as Charles Calderon (and his brother Ronald Calderon) that need to be thrown out of office. I support term limits because of greedy @#!#@# like him.

I just hope Jerry Brown is smart enough not to sign this.

Re:Stupid! Stupid! Stupid! Just what we don't need (1)

David Greene (463) | more than 3 years ago | (#36313788)

The city I live in has offered several retailers (like Costco) an exemption from the cities portion of the sales tax in exchange for coming into the city and creating more jobs, this is the way to go. We get people from neighboring cities who shop here because it has more shopping stores and lower prices. Another city near us has a similar deal with a shopping mall.

Classic race to the bottom. This is how southeast Michigan ended up they way it did. What you're saying here is that Costco gets a free ride from the city and because of that, Costco draws business away from other stores, further degrading sales tax receipts. Soon every business will ask for similar exemptions in the name of "fairness" or some other such nonsense and before you know it, your streets are crumbling.

No, this is terrible public policy. We should not strangle ourselves in the name of job creation. We should instead create a good business climate by investing in public infrastructure. That takes taxes and has been shown over and over again to spur many more jobs than any tax cut ever has.

Re:Stupid! Stupid! Stupid! Just what we don't need (2)

Doc Ruby (173196) | more than 3 years ago | (#36313948)

A reduction in unemployment will help fill the state coffers better than an increase in taxes.

So instead of California getting something like 8% of the Amazon sales in sales taxes, you'd rather CA got the income tax on the Amazon workers in CA. That would probably be something like 8% of their income [investinginbonds.com] . But what Amazon pays its workers is much less than the revenue each gets Amazon; probably a lot less than half. Even if you count the money CA saves in unemployment and related benefits, it's clear that CA's state coffers will fill better with the sales taxes than with income taxes instead.

What you're counting on is the discredited (and aptly named) Laffer curve [wikipedia.org] . Claims that reducing taxes increase state revenue are disproven anywhere you look. Moreover, the tax exemption and other subsidy deals offered corporations to locate in a given place never work to either increase revenue (or thereby decrease the burden on the taxed employees), or even to keep the corporation located there once subsidies drop. Because taxation how we pay for the services consumed by these corporations, and failing to tax them distorts the economy into a game in which the corporation's actual activity is merely a prop for tax evasion.

Another reason not to live in calif. (0)

Anonymous Coward | more than 3 years ago | (#36313804)

All this will do is make every online buyer in calif pay an extra ~%8 for their purchases.

This won't hurt the "internet companies" at all.

I do find it odd that a company that has 0% impact on the state social services, roads (the local delivery company pays taxes for them), or schools is now being forced to be a tax collector with no compensation.

I'd like to see Amazon cut off California (0)

erroneus (253617) | more than 3 years ago | (#36313822)

I know California represents a large portion of their business But you know? It's not their WHOLE business and it may actually even out to some degree by closing down any operations in California. But if a business as well-known as Amazon were to simply pull out of California, it would send the kind of message that nothing else could. It has never been done before as far as I can tell and if it did anything, it would put world-wide attention on it and would probably result in a lot of business not just leaving California, but the whole US to run their operations somewhere just outside of US borders.

The California government is an example of too much taxation. The cost of everything is too much across the board. They are a working example of why too much socialism in government is bad. But too little is also bad. There must be balance and that's not something California seems to have. When their answer is "finding new things to tax" to resolve problems, then they are not looking at CAUSES but are more interested in surviving day to day.

Taxes: Price Tag for Civilization (1)

Doc Ruby (173196) | more than 3 years ago | (#36313856)

The sales tax exemption for Internet purchases made sense while Internet sales struggled to establish themselves in the economy and the culture. Like most tax reductions or exemptions, it was a temporary exception. Because those sales taxes pay for the state's operations. The state has expenses for services that support the sellers, like the actual incorporation and all kinds of protections and infrastructure, and all kinds of protections for the buyers. When the transactions enabled by those services aren't taxed, the rest of the state's taxpayers must pay. And since California ran up even more debt under Schwarzenegger than it had when he was elected to reduce it, the expenses cost debt money, which is something like 150% of the original costs after interest is paid.

Sales taxes are the fairest and most reasonable tax. They scale with the benefit to the buyer and seller, and to the services that support each of them. They pay for us to live in a civilized society, instead of some corporate anarchy.

Seriously though (1)

T Murphy (1054674) | more than 3 years ago | (#36313862)

To be fair, if I pay sales taxes on most stuff I buy at physical stores, I don't see why it makes sense for internet purchases to be exempt- especially as shopping shifts increasingly to the internet. I would go so far as to say it is irresponsible of the government not to start figuring out a (fair) way to tax online retailers the same as physical stores, instead of shoring up falling revenue by increasing taxes on the shrinking pie. That said, I think before online taxation starts it needs to be figured out on a national level so we make sure everything is consistent.

First you have to figure out how taxes are collected: do I pay taxes for my state of residence, the state I am in at the time I click 'purchase", the state the item is being shipped to, the state the item is being shipped from, or the state the company resides in (assuming it's in the US)? Once you figure out which state gets the money, it would help to have some sort of file or server that sites can check to figure out how much tax to charge- sites shouldn't have to expend resources to stay on top of tax rates in all 50 states.

In the meantime, the states really should hold off on trying to implement such a tax, as it seems most aren't very good at thinking things through.

Re:Seriously though (0)

Anonymous Coward | more than 3 years ago | (#36313972)

umm they'll need tax rates for more then the 50 states. try for every county, possibly every town in the nation! i know in Florida where i reside some counties have an additional percent or 2 tacked on top of the states sales tax rate to cover local county projects

Interstate commerce (0)

Anonymous Coward | more than 3 years ago | (#36313974)

I may be mistaken, but isn't interstate commerce controlled by the feds and NOT the states? Which is why there is no tax to begin with. So does that mean the state now feels they can step up and take care of the illegal immigration problem, too, since they now care to venture into the federal responsibilities?

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