California Considering More Internet Taxes

dcg writes "San Francisco Chronicle is reporting on how web taxes could help the states, especially California, with its budget woes. One particularly disconcerting comment is from California's Controller Steve Westly. 'In addition to sales taxes, Westly said he is considering a tax on Internet access like those that appear on telephone bills. He also is looking at a tax on software downloads.' Would this affect only purchased software, or could sourceforge.net become a source of revenue for the state..."

Comments

Overheard

[Anonymous Coward]

"I know as well as anyone how much we owe the tech industry, but what are the geeks going to do if we piss them off with Internet taxes? Leave?"
-- California governor Gray Davis at a private dinner

Great way to drive Internet stores out of business

[fobside]

I still see the Internet retail stores as a flawed design. Yes, buyers should be paying taxes based on where the product ends up, like any other company that ships products. Though, even without taxes, why would a consumer pay $10 shipping for something he can get a 10-mile drive away? I fail to see how Internet retail really makes it, except in a few rare cases where products are rare.

Qualifying 'internet download'

[Silvers]

I would like to know what exactly he considers an internet download. Because technically, almost everything that flows through the Rx pair on your NIC is a download. So, taxing slashdot index.pl for every view? Or maybe only 'programs', but then are java applets and client side web code considered programs? Or how about online games, would those be taxed per connection, per hour?

I can only see that part failing miserably, or if it doesn't, that man is going to lose his office quickly.

To my california representatives

[t0qer]

Dear sirs,

I know you are looking for an alternative source of revenue for the state. However I feel that an internet tax will only stifle a already hurt sector of the economy.

Driving up the 101 by where I live, I see thousands, if not millions of square feet of office space empty. If you had not worked here during the boom you would not know that at one time these offices were filled with people paying income tax to the state.

Which brings to mind a question for me, what happened to the 100k in taxes you took from me over a 3 year period between 1997-2000? I know I was not the only person who contributed that much in taxes, yet I only got 6 months unemployment and still can't find a job in IT. Why should I try and go into another career? I'm 30 years old, this is what I trained for, and right now my skills are being severly underused.

So again, please don't add more gas to this fire by taxing an already hurting economic sector. We're suffering out here in Silicon valley living month to month on the small consulting jobs which are nothing more than a handout compared to a real paycheck.

And yes John Katz, i'm still eating ramen.

Re:Looking the wrong direction

[$$$$$exyGal]

Wal-Mart, Target and Toys R Us voluntarily began collecting online sales taxes in most states and all three now charge Internet sales tax in California.

It looks like some big companies decided to voluntarily start collecting taxes, so you can't just blame the government. However, it looks like there is one concrete reason why these companies are starting to tax, and one speculative reason (on my part). First, the article says they are collecting taxes, now, so that the states won't "back-tax" them in the future. Second, I speculate that some of the big companies that are ready to start taxing want to force everyone to start taxing. That way they will have a leg up on the competition. Some companies won't even be able to afford to implement a tax system, they'll just go out of business.

--naked