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California Assembly Approves Internet Tax
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."
"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!"
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.
"Hmm, how about we 'extend' taxes online and piss off silicone valley?"
Silicon Valley.
Silicone Valley encompasses Hollywood, Beverly Hills, and Orange County.
Charisma is the measure of someone's ability to lie with a straight face.
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?
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.
I've fallen off your lawn, and I can't get up.
The people of California voted for the representatives who approved this tax.
Palm trees and 8
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.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
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.
If you build it, nerds will come. Soylentnews.org
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.
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.
If you don't want to be a statist, move to Somalia.
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.
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.
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."
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.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
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.
1: Amazon isn't using any state services such as street lighting, sewers, electricity, police protection, and the like that your state taxes pay for.
2: You don't get instant delivery the way you will from a local merchant (i.e. the playing field isn't totally tilted towards Amazon).
3: You have a much smaller carbon footprint buying from Amazon verses driving your car to the mall (a plus to the environment).
4: You have to pay shipping on top of your purchase costs (the unfair Amazon discount over not paying local taxes is substantially offset by this.)
5: If states get this tax, how long before they start trying to tax Amazon profits from every individual state?
6: Without Amazon and the like, your local stores have a virtual monopoly over providing you these items. How much do you think that is a good thing for the consumer?
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
The universal answer is the only thing that counts is where the item is being shipped. Taxes have to be paid for that locality.
Unfortunately, it isn't just at a state level.
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.
If it was just 50 states it would be simple. It isn't. There is a separate tax rate for every state, county, township, city, and village. This means you have to have an exact address - zip code doesn't really cut it I don't believe. There are several services that are available today that will compute tax for you, but they are expensive services that you have to pay for. Or, you can just turn all your sales processing over to Amazon who can obviously do it all now. Once you get to a certain size it makes more sense to just have your own files and staff to maintain them rather than paying someone else to do it at a higher cost.
But there is no mistaking that it is a huge problem. I know there are city/county overlaps where within a single city there are two different tax rates depending on which county you are in. Buffalo Grove, IL (used to live there) is split in two different counties (Lake and Cook) which have different tax rates. I seem to recall there being even worse problems in Ohio with townships, villages and counties all having their own tax rates and the final answer was the sum of the three for a particular address. No, there is no central authority for this - everyone that is doing nationwide sales tax collection today is either paying for a very expensive service or is doing it themselves. And it changes constantly.
My guess is that this will be a huge windfall for Amazon and a few other very large retailers that are able to offer shopping cart/purchasing services to other retailers that can't afford the services to compute the tax.
I don't have a problem with California collecting sales tax on online purchases, so long as that tax is significantly less than the full sales tax, in light of the fact that they shouldn't pay for services they aren't getting. Of course, it won't be. They'll charge the full tax rate simply because they can. As for shipping, costs offsetting it, Amazon offers free shipping on most orders. In spite of rolling the shipping cost into the purchase price, they still come out cheaper than local merchants most of the time, and that's before you factor in sales tax. So it is leveling the playing field a bit, but it still doesn't compensate for California's exorbitant cost of living, land costs, construction costs, etc.
The bigger problem here is that Amazon only has a legal obligation to pay that tax as long as they have a nexus in California. Amazon has no physical presence in California. California is attempting to extend the definition of nexus to include affiliates.
So here's what will happen: California will pass the law. The day it goes into effect, Amazon will terminate its affiliate relationships with everyone in California, and will continue doing business normally without paying a dime of sales taxes. This is what has happened in every state that has passed similar laws, and there's no reason any sane, intelligent person would believe that Amazon would value California affiliates so highly that they would not cut them off in a heartbeat if it meant not losing a sizable percentage of California sales to other companies that don't have to charge CA sales tax. So basically, when this law is passed (and it almost certainly will be, given that our lawmakers are, by and large, idiots), the result will be a substantial loss to California's economy, which will result in a substantial loss in state tax revenue (all of those affiliates were paying California income tax on their earnings) without bringing in a single penny in sales tax revenue.
That said, it will set a great precedent if California does this. I'd be willing to place a bet that once Amazon shows that it has the stones to scrape off its California affiliates with about as much concern as you or I would scrape gum off of our shoes, no other state will be so stupid as to try this. Then again, there's that Einstein quote....
Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.
—Albert Einstein
Check out my sci-fi/humor trilogy at PatriotsBooks.
Corporations haven't killed people? How fucking clueless can you be?
Hint: look outside of the first world for once in your life.
By the way, how is the government going to keep corporations from treading on Citizens' Rights without taxes? Because that's what this whole "debate" is about. The government wants to collect taxes, and you libertarian-anarchists are screaming that it's an assault on freedom.