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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!"
"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.
Except they're now forcing businesses in other states to collect and remit taxes for items sold to Californians. This should be interesting because they're creating an interstate commerce tax which should normally be the jurisdiction of the Feds. Given the Feds got bent out of shape about Arizona doing the same with immigration, they either have to push a double-standard, or correct California's overstepping of authority.
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
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.
The US Supreme Court has already ruled on this. It all boils down to a simple fact: States cannot force companies that don't have a business presence in those states to collect and remit taxes due on sales to the residents of those states.
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
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.