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California Senate Approves Net Tax Bill
Grant Erickson points to this internet.com story, which says "On Thursday, the California state Senate approved a bill that requires businesses with stores in the state to charge their customers sales tax for purchases made over the Internet." The state's huge ($35 billion) budget deficit is named as a driving force for the measure.
This only affects people who live in CA and buy from California merchants. So this isn't going to affect the rest of us. Personally I don't see what the big deal is... California can't charge sales tax to "non-residents" because as yet the constitution still identifies interstate commerce as non-taxable.
Food not Bombs is a nice platitude but it breaks down when you notice that the Bombees are usually well fed
Actually, all states have that law... and most states have procedures to reclaim taxes paid in that state for items "used" out of state. Check your local law. In Theory, you are required to pay "USE TAX" on all items used in any location, MOST states empower merchants within that state to collect the USE TAX and refer to it as SALES TAX.
Food not Bombs is a nice platitude but it breaks down when you notice that the Bombees are usually well fed
Those of us in Minnesota always pay taxes on goods purchased over the internet or otherwise. It is called Use tax, and the idea is it protects our local business - while generating revenue for the state as an after thought... (I don't buy it either)
Nothing here to see - move along...
+++ UGUCAUCGUAUUUCU
Your point would be valid if he was suggesting a brick-n-mortar shop closing stores and moving out, but I thought he meant just moving operations (web site & supporting infrastructure) out of state. And having all those rich numerous californians as customers, serving them through the very same web site, but just having employees and servers located someplace else. While there are no doubt measures in there to make it more difficult (esp. for 'mixed' companies that still have physical existence) to avoid taxing, it's quite likely many pure net retailers might consider moving to another state. And considering cost of living at CA is also very high, salaries high, leading to higher personnel costs, does that sound all that unlikely? For this to work out for companies, though, they better hope neighbouring states do not follow (as then distribution centers could be located near state borders).
Note that many 'traditional' companies shuffle their HQs and operations from one state to another, sometimes due to change in leadership (CEOs want "their" company to "their" state), or due to tax incentives poorer states offer... headquarters especially are moved pretty often (even big companies like Boeing that asked for bids from 3 cities a while ago, and chose best offer, Chicago). And since for net retailers things should be even easier to move -- they usually don't have assembly plants or factories to move, at most just distribution centers -- it should be even more tempting to try doing just that.
Basically, California as a market will still be tempting; but that's different from suitability as "home state".
I like paying taxes. With them I buy civilization -- Oliver Wendell Holmes
The thing is, mail order has been exempt from this forever. Ordering online is the same thing as ordering over the phone from a catalog. So there is a long standing precedent of not taxing people from outside of your state with your sales tax.
Now, being a Californian I have another point I'd like to make. When Davis came into office we had the biggest surplus in all of Californian history. At the end of his first term we now have the biggest deficit in our history. Were did all that money go?
It went two places: First, in typical political short sightedness our government started spending spending spending on various new government programs. How soon they forget the lean times.
Secondly, we deregulated our utility companies. However, they were deregulated without adequate competition. Deregulation was suppose to make prices go down. But since the same companies owned both the electricity generating companies (Like Sempra Energy) and the delivery companies (Like San Diego Gas & Electric) the greedy bastards took advantage of this new cash cow. The companies that use to make a profit when our electric bills were $75 to $100 a month tripled our electric rate (sometimes higher). My personal electric bill went from $78 one month to $224 the next.
So what does our governor do? Does he take over the generating plants like he threatened to do? No, he makes a deal with the electric companies to pay them off via the state's general fund.
So our huge surplus of ca$h went not to civil programs, not to a savings account that would generate interest for future lean times, not to tax rebates for those of us who paid them the money, it went back to the electric companies who were screwing us in the first place.
So thank you so very F*cking much Mr Davis! You've taxed us, you screwed us, you got in bed with the electric companies and screwed us again, and now you're going to tax us some more.
That's why many of us are trying to recall the Bastard.
You know, everybody seems to be asking how the nation can afford another tax cut. But nobody ever ask me if I can afford another tax increase.