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

Looking the wrong direction

[jmuzic1]

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

Re:Looking the wrong direction

[numbsafari]

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!

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

Solution!

[swordboy]

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

Re:Solution!

[baywulf]

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.

Tax on Downloads

[cgori]

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.

Re:Tax on Downloads

[ewhac]

"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

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

How?!

[Velocity4]

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...

welcome to Nevada

[technoCon]

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?

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.

I have a better idea!

[Anonymous Coward]

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

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.

This will be a mistake...

[Billy the Mountain]

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