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California Considering More Internet Taxes

Posted by ryuzaki0 on from the got-to-pay-off-the-thieving-energy-companies dept.

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..."

34 of 475 comments (clear)

  1. Looking the wrong direction by jmuzic1 · · Score: 5, Insightful

    Amazing how quickly they look to tax more instead of looking at their budget and ridding themselves of all the bloat of government.

    1. Re:Looking the wrong direction by numbsafari · · Score: 5, Funny

      It's not their fault they have no fiscal discipline!

      Get with the friggin' program!

      It's the fault of the evil corporatists who exploit the citizens of california by providing them with high paying jobs and great products and merchandise, forcing them into a culture of consumerism. It's the fault of the wealthy exploiters who evade their tax obligations! It's the fault of McDonald's because they sold hamburgers to people who consumed them and got fat and have health problems! The citizens didn't know that eating 3 fatty burgers a day and a large Chocolate Shake with every meal could kill! They were innocent!

      It's the fault of the gun companies because they sold guns to the criminals--forcing them to commit crimes and thus forcing california to build prisons!

      If only California were more like Europe. Stupid American capitalist bastard! You are so simple! You just don't get it!

      Blame someone else, that way you look really intellectual!

    2. Re:Looking the wrong direction by mAIsE · · Score: 3, Interesting

      an interesting effect would be to see allot of E-Tailers move out of California if this were enacted.

      Maybe say to Oregon or Texas, just somewhere more buisness friendly.

      Then they would be screwed out of alot more than sales tax.

    3. Re:Looking the wrong direction by $$$$$exyGal · · Score: 5, Interesting
      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

      --
      Very popular slashdot journal for adul
    4. Re:Looking the wrong direction by Dr.Evil · · Score: 4, Interesting

      Spoken like a true Libertarian (or a demagoguing Republican). There are budget cuts happening all over California. They're coming in public schools, rural healthcare, state parks, higher education, and more. Those are services that most Americans, and especially Californians, think are important. In fact, in order to cover the necessary gap, Gov. Davis has proposed more cuts than new taxes.


      Incidentally, I decided to reply instead of modding you down, even though zapping your "insightful" bonus was very tempting.

      --
      Right...
    5. Re:Looking the wrong direction by Fastball · · Score: 4, Interesting
      I know you think you're being funny, but California's deficit is almost entirely to blame on the price-fixing during the energy shortage which is in fact the fault of, big business.

      This is patently false. The California state legislature voted to cap energy prices for consumers under the guise of deregulation. So you had consumers paying a fixed price for energy despite an energy shortage. And when there's a shortage of anything, prices rise. So there you had Californians paying pennies on every dollar the state of California expended for energy.

      California's energy plan was anything but deregulation. You don't get something for nothing, but that's how the California state legislature saw it, and so you have them to blame, not one man in a marble house thousands of miles away.

    6. Re:Looking the wrong direction by rworne · · Score: 3, Insightful

      You can't just slap together a power plant in a few months.

      California hadn't built any plants for years before the power crisis, possibly a decade or more. The main reasons are all the environmental studies, regulations, NIMBYism, and protestors.

      Californians are just reaping the fruits of their political choices, plain and simple.

      Bush and his gang might have left California in a lurch just for "payback". As a Republican living in California, I somehow find all of this less than amusing.

      --
      I tried every decent and legal way I could think of to resolve the issue w/the business before I rented the chicken suit
    7. Re:Looking the wrong direction by satch89450 · · Score: 4, Interesting
      an interesting effect would be to see allot of E-Tailers move out of California if this were enacted. Maybe say to Oregon or Texas, just somewhere more buisness friendly. Then they would be screwed out of alot more than sales tax.

      San Francisco considers the Sierras "their" playground, so why not move closer to where you play? Nevada welcomes any and all e-business. Indeed, there is a pool of high-tech workers already in place, sufficient housing that is considerably less expensive for employees that move with the companies, crime rates that compare very favorably when compared with the Bay area (for example, there have been seven murders where I live in the past 11 years), an international airport that is underutilized right now, and Internet bandwidth almost for the asking. South Reno is where many e-tailers have already set up shop...but there is plenty of room for more.

      One reason that some e-tailers came here is that Nevada has no reciprocal arrangement with any other state regarding sales tax. (Don't believe me. Check it out for yourself.) With less than 2 percent of the population of the United States, our sales tax situation is much more friendly. Instead of hundreds or thousands of taxable areas to track, you only have to worry about 17 areas -- the Nevada counties. Out of state taxes? Right now, you don't sweat it if you are completely in Nevada. Let the other states deal with the problem as they see fit. Until the Feds step in, don't expect Nevada to force the burden of collecting other states' taxes on you. (But get rid of all ties to all other states to make this work.)

      The body of Nevada law is MUCH simpler, and the taxes are low. (Governer Quinn is trying to raise business taxes, but the level is nowhere near where California has staked a claim on yourrevenue.) Traffic jams? Where?

      The advantage that Reno/Sparks/Carson has over Las Vegas/Henderson is that we don't have an upcoming water shortage. That makes Reno more attractive to businesses currently in the Southland who want to move east to avoid Sacramento's nose in their tent.

      Think Reno is too expensive? Consider Carson City. Fallon (Amazon.com and the Navy did). And other places in the Silver State.

      If you are worried about the morals of Reno and vicinity, you need not be. During the past decade, the southern part of Reno has become family-friendly. For example, by law there are no brothals in Washoe County, and the "strip joints" are all in the northern, industrial part of the city. There are some parts of Reno where Bay area people would feel right at home, as we have many of the same chain stores and amenities -- but in addition our houses have open space and lawns, instead of the alleys that characterize many of the housing developments in places like Mountain View or the "row houses" of 19th Avenue. You can find schools in which the parents have a lot of say in what is taught in them. Parks? Yes. Ask a Realtor for more information on what Reno and vicinity has for the kids.

      If you are rich and clean, consider coming to my home, Lake Tahoe, to set up shop. Incline Village has many people like me just waiting for you to bring your business and succeed. Or, if you prefer a louder lifestyle, consider coming around Wayne Newton's land on the East side of the lake and give Stateline and Zepher Cove a look-see.

      It's four hours from where you are now (less if you are on the East side of the Bay) so you can still easily go to the places you know and love, and see the friends that decide to stay behind.

      All you have to lose are the individual income tax payments -- Nevada has a personal income tax rate of 0.000%, and even the current Governer isn't asking for a change in that tax rate. Sales taxes are less, at 6.0-7.5% throughout the state. Property taxes are less than those in the Bay area or Los Angeles, according to people who own houses here and "there".

      Check it out. Many ex-SF people live here now.

    8. Re:Looking the wrong direction by wattersa · · Score: 3, Funny

      And no gun control!!! This is sounding better already-- I've always wanted a full-auto MP5!

    9. Re:Looking the wrong direction by rworne · · Score: 3, Insightful
      California has a long approval process. If you know what that means, it means "environmental impact study" along with whatever permits are required.

      It's been commonly said that no power plants were built in the 90s, and the environmentalist websites try to debunk that. After reading what they say, it turns out there were some plants built. All small, mostly non-utility plants.

      In this article, near the bottom, it talks about environmental and (mostly) political opposition to natural gas burning power plants that are popular in California.

      But we may be both right, here they talk about this:
      What most likely stopped many power plants from actually being built is a powerful NIMBYism (not in my backyard) mentality in California that is in no way limited to "environmentalists." Almost no one -- neighborhoods, businesses, golf courses, hotels, etc. -- wants a power plant, a landfill, radio tower, etc. in their backyard. The environmental "extremists" that often oppose such projects no matter what, often team up with local citizens and businesses (i.e., non environmental extremists) to stop the project. However, many projects are stopped by NIMBYism alone (i.e., little or no environmental opposition was present). NIMBYism and Environmentalism are not the same entity, although NIMBYists often use environmental arguments and they
      often enlist environmentalists and environmental groups for support. Ask yourself two simple questions: If someone proposed a new powerplant or new landfill near your neighborhood or business, would you try and fight it? Do you consider yourself a
      liberal environmentalist?
      --
      I tried every decent and legal way I could think of to resolve the issue w/the business before I rented the chicken suit
  2. Solution! by swordboy · · Score: 5, Funny

    Why don't they just tax the tax revenue? There'd be a recursive loop and money FOREVER!

    --

    Life is the leading cause of death in America.
    1. Re:Solution! by baywulf · · Score: 5, Informative

      You do get taxes recursively. You pay income tax on your salary. Then when you buy something, there is a sales tax. Then the company which got your money pays taxes on it. Then they pay their employees and that gets taxes. And it repeats on an on.

  3. Tax on Downloads by cgori · · Score: 5, Informative

    They are simply closing a (well-known) loophole.

    If you buy expensive software (i.e. chip-design tools at >$100k per user) and you take delivery via FTP instead of physical media (CD/tape), you do not owe sales tax. On a big purchase (multi-million $$) the 8% is a BIG deal. It happens a lot in the Valley.

    I'm surprised that it took the bureaucrats in Sacramento this long to find a revenue "source" this big.

    1. Re:Tax on Downloads by ewhac · · Score: 5, Insightful

      "This software is licensed, not sold..."

      A popular quote from most end-user license "agreements" (which are all unethical, anyway). Different tax rules apply for license transactions than sales transactions.

      Schwab

      --
      Editor, A1-AAA AmeriCaptions
  4. I can't wait... by swordboy · · Score: 4, Informative

    With all this taxing crap, I can't wait until the US realizes that they are shooting themselves in the foot!

    --

    Life is the leading cause of death in America.
  5. Overheard by Anonymous Coward · · Score: 5, Interesting

    "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

  6. How?! by Velocity4 · · Score: 5, Funny
    Ok, I'd like to ask how the heck you're going to do this without a massive invasion of Privacy?


    I can imagine my statement:
    You have downloaded: SupAR WArEZ!!! $0.50c
    You have downloaded warez, and and broken copyright laws: $5000


    Also, doesn't it defy the entire point of the internet? (apart from nuclear safty) a free database of information for the education of the people?


    Why doesn't the federal government help CA out, we 'were' a major source of taxes, all we need is a break. Sigh...

  7. welcome to Nevada by technoCon · · Score: 5, Insightful

    how long would it take for every server with any kinda taxable activity to relocate to Nevada? or Vanatu? You can bet that after any government starts taxing something, it'll never be free again. The power to tax is the power to destroy. This is an opening move in the destruction of high tech in California.

    My dad worried about out-sourcing union jobs to Mexico. I worry about out-sourcing programming jobs to India. What's to stop the out-sourcing of all the other high-paying professions to low-tax areas?

  8. Great way to drive Internet stores out of business by fobside · · Score: 5, Interesting

    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.

  9. Tax on software download... by gmuslera · · Score: 4, Interesting

    This could be very unfair, how that be controlled? By monitoring access to software vendor's ftp servers? sourceforge? This will mean once and for all the rise of p2p protocols, for a good reason now.

    Or counting bandwidth used? This will cause problem with any piece of software that check for updates (antivirus, "smart" operating systems, advertising software/spyware, etc).

    At least if they return taxes on received spam some people will not be so angry, in fact, could mean finally that "get rich fast" schemes work at last.

  10. Revenue booster? by Sheetrock · · Score: 4, Insightful
    Like most people, I enjoy using the Internet on a daily basis but consider it a luxury I could live without. Taxing Internet access makes more sense than taxing phones or food or other staples of life because it is generally the well-off that can afford access to it.

    Likewise, Internet sales taxes are desperately needed. Not only are the well-off more likely to purchase things online, but the fact that they can dodge sales tax by doing so while the poor must pay when they go to the local stores is nearly an insult: this is one of those 'rich getting richer' schemes that doesn't get much airplay, but it should.

    I'll agree that it's been a pretty fun ride, but we've already discovered that the Internet isn't free. Now it's time for the tax collectors to catch up.

    --

    Try not. Do or do not, there is no try.
    -- Dr. Spock, stardate 2822-3.




  11. I have a better idea! by Anonymous Coward · · Score: 5, Funny

    I have a better idea for getting California out of its budget problems. Shake Gray Davis upside-down until his campaign donations fall out.

  12. Qualifying 'internet download' by Silvers · · Score: 5, Interesting

    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.

  13. Will lose more business for California.... by jsimon12 · · Score: 4, Insightful

    All this will do is accelerate the exodus of high tech firms from California. Many companies are already moving operations to cheaper states, Sun for example is moving a lot of its operations to Colorado. All this taxing is going to do is accelerate that process and leave California with a smaller tax base in the future. Few politicians seem to think more then 2 or 4 years down the road, basically what they need to do to get reelected.

  14. To my california representatives by t0qer · · Score: 5, Interesting

    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.

  15. California won't fix its problems by ShatteredDream · · Score: 4, Interesting

    Instead of scaling back its operations and looking for useless projects that could be eliminated to fund core services, the state blithely adds new taxes. Why not just do something really progressive like *gasp* privatize the public healthcare and housing services. Let poor citizens in good standing keep their houses, apartments, etc that they get from public housing. You want to give them a sense of pride? Do that or give them a really really small 0% interest mortage on it to the tune of say.... $50-$100 a month. That way they're paying their way like everyone else and surprise, surprise the rest of California isn't paying for them anymore, and is now getting money back!

    California is what Socialism on a greater scale in the US would be like. Non-essential public services such as free healthcare for the indigent, public housing and welfare services aren't here to actually fix a problem, they're here to punish the middle and upper classes. Don't give me that bullshit about "that's not really Socialism." No shit sherlock, Socialism exists only on paper and in the head of utopian hippies who are pathologically incapable of dealing with reality. The reality is that big government destroys civil rights and encourages violence. You want to make a difference? Vote for a Libertarian and take that percentage of your income that would have gone to welfare and give it to a homeless shelter or a free medical clinic. Those people genuinely care. The money won't get lost in a bureacracy and will actually help the poor.

    I live in Virginia so I can only watch CA's problems from afar. CA's problems are of their own making. The people of california deserve this problem. I have no respect for a group of people that have police departments as institutionally corrupt as the LAPD yet have enough faith in the government that they think gun control will protect them. You can't trust your own fucking cops and yet you give up more rights to big brother. What will it take Californians? Bin Laden getting ahold of a stolen nuclear weaponing and vaporizing LA for the majority of you to realize the government can't provide for and can rarely pre-emptively protect you?

    --
    Click here or a puppy gets stomped!
  16. This will be a mistake... by Billy+the+Mountain · · Score: 5, Funny

    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.

    Heh, software downloads would undoubtedly apply to JavaScript, since JavaScript is software. I can see it now, Granny blunders into a porno site and after experiencing a JavaScript blitzkrieg winds up owing the state of California $47.86.

    BTM

    --
    That was the turning point of my life--I went from negative zero to positive zero.
  17. and yet the don't cut anything they should cut.... by Shivetya · · Score: 4, Informative

    There are literally hunderds of programs that they should cut but they don't. However being the typical politician Gray has decided to piss people off into allowing him to tax ANYONE and EVERYONE by raising the spectre of nuking those prized programs.

    In other words, Gray is doing what he has always done. There are two kinds of government employees. Essential and non-essential.

    That should be an indicator of who needs cut.

    For comparison, a local county is 67 million in the hole. They refused to cut their arts budget of 6 million, now tell me, whats more important? Buying art from people who can't sell it otherwise, or paying teachers?

    That is the biggest difference between libertarians and those other two. Governments currently spend money on stuff they have no business doing so. But they have the guns to back them up, the idiocy of the general public to hide behind, and many cohorts in the press and special interest groups to run cover for them.

    --
    * Winners compare their achievements to their goals, losers compare theirs to that of others.
  18. Re:Enron et al. by mako · · Score: 3, Insightful
    First let me say nice troll.

    This is of course patently untrue. California is in this position due to mismanagement. Gray Davis is a moron. California wanted to purposefully make deregulation look like a failure so they passed laws doomed to fail. Combined with the inability of utilities to build power plants due to the Green i.e. Communist (all environmentalists hate private property rights but this is another topic) policies in place.

    So the people of California got a wonderful lesson in supply and demand. Unfortunately instead of learning their lesson they whine and cry like the children they are.

  19. Oracle by SashaM · · Score: 4, Funny

    Well, they have to get the money to pay for all those Oracle licenses somewhere...

  20. The wrath of the geek by CleverNickName · · Score: 4, Funny

    "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

    "Why does my homepage say '3y3 0wnZ0rr j00 gr3y d@v1Z!'? What does that mean, exactly?"
    -- California governor Gray Davis, looking at his computer in three months.

  21. Patently false? Not quite. by forii · · Score: 4, Insightful
    This is patently false.


    Patently False?

    Not

    quite.

    Sure, California's scheme for "deregulation" had some major flaws, but that doesn't excuse Enron, as well as other energy corporations from committing wire fraud, to the point of almost bankrupting the state.

  22. You Need to Prove He Said This by VividU · · Score: 3, Insightful

    How lame. An AC attributes a quote to the Governor of California overheard at a "private dinner" and it gets modded (+5). It's actually more revealing of the type of morons that frequent this great site than any thing the Gov. supposedly said.

  23. Wait a minute! by stinky+wizzleteats · · Score: 3, Insightful

    States are having budget crises for the same reason we are - there's a RECESSION. I therefore don't subscribe to the idea that the people, suffering under the same fucking recession, should somehow be expected to foot the bill to maintain the pre-recession budget levels of state governments.

    If tightening our belts is good enough for us, why is it not good enough for them?