Should Internet sales in California be taxed?

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I usually oppose all new taxes, but there is growing sentiment that online retailers should collect sales tax in each state they do business in and forward that money to the respective states. I think that is fair.

Why should a company like Amazon.com sell books in California without charging sales tax? That is unfair competition to the brick and mortar stores in our state.

The L.A. Times addressed this issue in an editorial today. Here are a few excerpts:

California has considered a law requiring nationwide online retailers to calculate, collect and remit sales taxes that buyers are supposed to pay but rarely do. Assemblywoman Nancy Skinner (D-Berkeley) introduced AB 178, and Democrats included her approach as part of the budget proposal they sent Gov. Arnold Schwarzenegger.

Based on the Legislature’s action, Overstock.com severed its relationship with its California affiliates. Now that Schwarzenegger has made clear he won’t sign the bill, he’s taking credit for Overstock reversing its decision and for protecting Californians from new taxes.

Wait a minute. The governor’s action did not protect anyone from having to pay more tax. Californians owe the $1 billion in use taxes anyway. The only question was whether the law should be changed to require online companies to charge the tax at the virtual checkout counter. It should; but there is a fairer way to do it than the New York-like approach in AB 178.

That approach, after all, does penalize the growing sector of California-based online businesses that match buyers with great deals all over the Web. Many of those businesses would be deemed affiliates, and would be dumped by companies that don’t want state ties to turn into requirements to add sales taxes.

Our state is broke.  Of course we ought to cut more waste from the budget – but allowing giant online retailers to sell products here without collecting sales tax is ridiculous.  Schwarzenegger is wrong on this one – and if that means that California affiliates will be dropped by the unethical online giants, then we ought to ask California’s residents to not spend their money on those websites.

This is not about new taxes.  It is about treating all businesses in our state fairly.  Allowing giant online retailers to undercut our own local stores is just plain nuts!


About Admin

"Admin" is just editors Vern Nelson, Greg Diamond, or Ryan Cantor sharing something that they mostly didn't write themselves, but think you should see. Before December 2010, "Admin" may have been former blog owner Art Pedroza.