California Senate Approves Net Tax Bill 591
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 is nothing new, right? (Score:4, Insightful)
E.g., I live in NJ, I buy from a company that has no physical business presence (i.e. a store-front or hq or warehouse) in NJ. I am not charged sales-tax. Legally, I am required to declare these items when I do my income taxes for the year and pay the sales-tax then. If I buy online from a store that exists in NJ (e.g., Best Buy), then they must charge sales-tax and that amount is included in my bill.
Maybe this is just NJ, or maybe I'm just confused. Any lawyers/accountants who can shed light on the matter?
customer perspective (Score:4, Insightful)
Hm, so if I buy things from stores that charge me California sales tax am I eligible to get a vote in California in addition to my Texas one, and get Californian social services as well as Texas ones? Could I transfer from UT-Austin to UCB without losing instate tuition status?
If not, this is taxation without representation.
This changes nothing (Score:5, Insightful)
Amazon already keeps its distribution facilities in Oregon and Nevada for just this reason. They might get caught if they have a supply/delivery depot set up for same-day delivery in LA.
This is mainly to put some muscle into collecting from folks like Wal-Mart, Barnes & Noble and Borders, who claimed to have separate businesses running their internet. The new law states that the same 'brand name' is a trigger for tax collection.
Already being done? (Score:1, Insightful)
Re:moving on out? (Score:5, Insightful)
Re:So does this mean (Score:4, Insightful)
Canada (Score:1, Insightful)
Re:That is the sound of inevitability.... (Score:5, Insightful)
While I think that there is such thing as "too much taxes", I don't think we're there yet. The only problem with this system (IMHO) is that when each state has their own laws, it will become very difficult for small businesses to conform and collect the proper taxes for each state.
If the states want money from online sales, propose a federal tax, whose money would be split between states proportional to the ecomerce that is done in each state.
While the system wouldn't be perfect, it would be a huge step up from 50 separate laws!
An online Starcraft RPG? Only at [netnexus.com]
In Soviet Russia, all your us are belong to base!
Re:That is the sound of inevitability.... (Score:5, Insightful)
"their" money, they won't let any opportunity pass them by.
Well, it's still *your* money. They either take it this way or another way. The effect is the same. Also, I really don't see how the net is so special that things you buy over it shound't have tax on them. The exception might have been good for a while to promote buying over the net, but I don't think it's necessary anymore.
Any libertarians here? (Score:2, Insightful)
CA Legislature (Score:2, Insightful)
And you know when money is short the easiest and quickest way to PISS OFF only "rich people" is to raise taxes. That is right, PISS OFF the people who MAKE the economy.
Instead of trying to control spending, the democrats only solution is to raise taxes, drive business out of the state, and give away services to people who don't contribute a thing to the economy.
When was the last time a democrat ever suggested cutting some bloated social program of dubious merit? NEVER. Instead the beat up the "rich".
It is like the right wing on Terrorism, where evertying is a potential terrorist plot or whatever.
The clear point is that there needs to be opposition. It doesn't matter if you are a democan or republicrat.
Next time, vote libertarian. Real political change, Real Freedom.
This could be bad for Californias tech industry... (Score:3, Insightful)
Hell if the same item costs less somewhere else..thats where I'll go...
Good luck Cali, this is a true gamble.
Re:What would be cheaper... (Score:2, Insightful)
Re:That is the sound of inevitability.... (Score:3, Insightful)
Oregon doesn't have a Sales Tax (Score:4, Insightful)
They should move on up to Oregon; we don't have a sales tax and we've got a lot of people who would like to have a job.
Re:That is the sound of inevitability.... (Score:5, Insightful)
Very Simple Solution (Score:3, Insightful)
If you go to an online vendor, and you notice they're located in Califorinia, go someplace else.
There's countless online retailers and even if plenty of them are located in CA, you've got plenty of options left over. From time to time, it may be inconvenient, but it shouldn't be that bad.
Remember that if you demonstrate that new taxation like this increases revenue for the state, others will follow. Slashdot has got to represent a significant portion the online market: let's make sure other states don't do the same.
Again California shoots off its own foot. (Score:5, Insightful)
If this goes into effect, what will the effect be? Simple.
California's sales tax is typically over 8%. (It varies by location, because cities and counties are allowed to add on their own small deltas.)
So the result will be that companies which are primarily net retailers will CLOSE ANY STORES THEY HAVE in California. Standalones will move their operations to other states. Even large retail chains with an internet sales outlet may split into subsidiaries.
8ish percent of gross is a LOT in a heavily-competitive market. And the WHOLE POINT of buying something on the Internet is that the price differential must be more of a draw than the lack of a local facility is a repellant. So if a company has to charge an extra 8ish percent if it continues to have a presence in the state, it will, if at all possible, eliminate its presence in the state, rather than watching the bulk of its business switch to its competitors or just go away.
The net effect on California's budget will be negative. It will lose more in taxes, on store sales, employee income taxes, and other taxes on the businesses that fold up and move (or die) than it collects. It will also incur extra costs from the business shutdowns - such as unemployment and/or other social program costs for workers that don't move to follow the business.
==========
If this also passes the assembly it will almost certainly be signed into law - because Gray Davis is clueless about anything financial. (Witness his reaction to the "electric deregulation" debacle.)
They are just following the old rule... (Score:5, Insightful)
- Ronald Reagan
Of course, the rulers of the Peoples Republic of California filed to notice that Reagan didn't mean this as an advice.
-DVK
Consumer: Don't buy from CA (Score:3, Insightful)
Re:moving on out? (Score:5, Insightful)
*applause*
Let's see - we have a two-year boom in capital gains tax collections (oh yeah, you non-Californians probably don't know that we pay an extra 9.3% state tax on top of the 20% federal rate for long term capital gains), so we jack up spending by 40%+ over a term.
Then, when boom turns to bust, we're shocked - shocked, I tell you! - that revenues have fallen. But there's an election coming up, so we keep spending.
And taxing. Mandatory health insurance? Sure, why not fuck over the few remaining businesses in the state, they've got money! Jack up the taxes on employers for extension of maternity leave, too! Money grew on trees during the dot-com boom, the private sector obviously has an infinite supply of the stuff, so what's another 1-2% of that infinite supply when there's prole votes to be bought?
In answer to your question, "n+1", where "n" is the number of ways a given transaction is taxed in the preceding election cycle.
In Nevada, there's no state income tax, and there are places where you can walk down the street with a beer in one hand and a cigarette in the other.
In California, you pay the highest taxes in the nation - higher than most of Canada - and soon, you'll need proof of age-21 to purchase dangerous foods like cigarettes, beer, and now Oreo cookies [sfgate.com].
Atlas, if you're listening, it's time to shrug.
Comment removed (Score:4, Insightful)
Re:Huge budget deficit? (Score:3, Insightful)
Money_Taken_In - Money_Spent = Budget_Surplus_Or_Deficit
Negative values of Budget_Surplus_Or_Deficit are deficits.
Why don't they try SPENDING LESS rather than TAKING IN MORE?
Oh, I forgot, the California is on the LEFT coast.
Exactly--mod parent up!
If only those idjit libbruls understood that it's simply not enough to merely spend more--you need to take in less at the same time!
Massive tax cuts are the only way to combat massive deficits!
Trickle-down econom--err, the "wealth effect" [washingtonpost.com] is the only thing that can save us now!
Down the rabbit hole! [whitehouse.gov]
Re:Tax Fast Food (Score:3, Insightful)
So do I. Of course, I strongly disagree with your position. Why? Your 'the state pays for health care' doesn't hold water, as you live in the US (no state health care).
It's just a classic case of the usual crap. "I don't like what you're doing, so I'll be sanctimonious and tax/ban it."
Wouldn't it be easier... (Score:2, Insightful)
If the people who didn't have jobs, moved to where there WERE jobs?
I tell ya, this country is going down the tubes for more reasons than just taxes.
Re:Money's a drug (Score:1, Insightful)
I'm guessing if CA would better regulate he illegal immigration, they'd save a ton of money slipping out through welfare...etc. Not that that's the only problem there, but, I'd be willing to bet it would stop a pretty large amount of the 'hemorraghing' of tax dollars...
Prices now higher, lower sales, lower tax revenue (Score:4, Insightful)
Stupid, stupid move.
All these CA companies who had good internet sales now charge 6-8% more than any other site. They'll lose a fair portion of those sales. Their overall profit now decreases, which means they do not have as much income. Now CA still does not collect much of the sales tax - but it also has killed off a portion of the corporate income tax. To top that off, already struggling companies will lay off more people since their profits are down. More people on unemployment and less individual state income tax. Instead of coming out ahead, CA has set itself up to create an even worse economic situation than it is already in.
Again, I say, stupid, stupid move.
Re:moving on out? (Score:3, Insightful)
Yes.
California (my native state, and where I reside for the moment) appears to be trying to tax its way out of its deficit.
This will of course fail miserably, because smart business owners will get the hell out of Dodge. It is already far more expensive to do business here than in most other states. The state legislature aggravated the problem quite a bit recently by passing legislation requiring any business with more than 25 employees to provide six months paid maternity/paternity leave to both spouses in the event of a birth.
I know Buck Knives recently announced it's leaving the San Diego area for Idaho, after being here since the 50's.
California is in a whole lot of trouble...and yes I blame the Democratic legislature over the last couple of decades. If you want to help out, a good start is the Recall Gray Davis [recallgraydavis.com] site.
Even if he is recalled, I may no longer be here to enjoy it...software jobs are few and far between in these parts lately.
So .. how has this changed from how it works now ? (Score:5, Insightful)
No choice in the matter.
So basically, California's Gov isn't making a new law, he is enforcing a federal trade thang-a-mabob. He is ALSO protecting the REAL small business from closet industry. [which is good and bad i suppose.]
Makes sence to me actually, as bad as it sounds, why SHOULDN'T an internet store have to pay sales tax? if you have a physical location where you ship goods from, and ACT like a business (and expect to rake in the $$), you should be expected to have to behave like a business.
[And before all you 'free as in beer' folks start yelling
In the end of the day, business is business. Be it online, or offline - the laws are in place already.
Sure, it would really suck to be selling cold-cast reproductions of klingon's out of my mom's basement and have to *gasp* actually have a merchant ID and pay taxes on sales. [keeping in mind, you don't have to pay INCOME tax unless you make profit, or make over X a year in sales.] But these are not the folks he is going after. $10 in taxes a year from the 3 models this kid sells isn't going to make a big dent in 35 million/billion/whatever.
California is going after the folks who are using the internet as a loophole to avoid business taxes
Not like I begrudge the chain from TRYING:) thats what free market is all about. Use a loophole until it gets plugged
Blarg
Re:Any libertarians here? (Score:3, Insightful)
Re:That is a tax on the poor, no way (Score:5, Insightful)
I think you're arguement just says that this kind of tax is a tax on stupidity and laziness which I have no problem with.....
Re:That is a tax on the poor, no way (Score:5, Insightful)
1 Whopper medium size combo meal with tax: $4.06
Feeds 1. Final price: $4.06 per person
1 pound Barilla spaghetti: $1.29 (when on sale
1 jar Ragu spaghetti sauce: $2.50 (when on sale $2)
Grated cheese and electricity: $1 (overestimate)
Feeds 2-4 people. Final price without sale: $2.40 or $1.20 per person.
That's for name brand stuff, and when it's not on sale. If you make spaghetti on sale, it can cost less than $1 per person, and is more satisfying and healty than fast food.
Re:Recall Gray Davis (Score:3, Insightful)
It is his fault that he increased state spending buy double digits in each of his first 3 years in office, though.
Re:Recall George Bush (Score:1, Insightful)
Re:That is the sound of inevitability.... (Score:4, Insightful)
Damn the torpedoes! Sink that economy. (Score:3, Insightful)
Let's see, if I'm an e-tailor with a single/store outlet in California that's doing marginally. Time to close that outlet.
Does this tax effect someone who is just running their server in California? If so, then time to move the server and business out of California.
Watch that sputting economy in California, go for broke.
Re:Money's a drug (Score:2, Insightful)
--a few places to look at for cutting in cal
--public "education" now in a rainbow of languages and dialects, it's a failure. It could almost be entirely replaced with homes schooling for minor education.
--criminal justice "system" where the bulk of the crimes committed are directly or indirectly related to the "war on drugs", which exists because by keeping them illegal it keeps the massive profits up, massive profits mean "crime" and associated violence. It's like liquid drug alcohol prohibition never happened, no lessons learned. They love it! It's a growth industry for government, completely successful and massively profitable, on several levels.
--completely out to lunch and uncontrolled illegal immigration. Remember, all those humans who should be back home making something of their own nations (and kicking their own dictators asses and hanging them) are in cal, requiring the same or larger amount of government services as all the legal people, with the added benefit of shipping a big part of their pay checks back home via western union and similar. And there's a thought, why not a 100% tax on exporting CASH out of the country? Someone please explain on how that benefits the US shipping cash out so that more illegals can pay the coyotes to sneak in?
In my little county here in georgia, just in three years time, the population has gone from under 15,000 to over 20,000, with almost completely these "new arrivals" being illegal immigrants. We have to build two new schools to handle all these new kids, plus the hospital went from breaking even to completely utterly in the red, it's broke, kaput. Oh yes, taxes have gone up. Want to hear a little goody? Local farms had a 300% increase in property valuation for taxes this year, even though none of them could sell those farms for 300% more, or have "enjoyed" a 300% increase in their net. And talk about being a blue collar guy looking for more work, sheesh o rama. I'm managing to pick up an odd job here and there, that's it. It is much less than "poverty level" if I extrapolate my earnings this year. Much less. And woe unto me if I can't pay my insurance on the car and get pulled over! That's illegal, funny, though, that illegal immigrants seem to be all over, no one gives a crap. A few fatcats use them for cheap labor, they profit, everyone else loses, but they got the local juice to keep it going. Hard to "vote the bums out" when the entire local power structure, D or R, is in on it. *Some* immigration we could handle here, not this level, it's just insane. And now we got GANGS, actual big city gangs who paint gang graffiti on the walls and there's been home invasions and shootings and whatnot that just slap didn't exist before. But, we get to say we are "multicultural" now!
Can't imagine how bad it is in cal now. Has to be at obscene levels. Everything I read from there is dropping wages,industries shrinking and going away, increasing government size and bloat, combined with a complete demographic take over (You got aztlan coming there, have fun) MECHA gonna ownz joo. And they think violence is a nifty tool as well, just read some of their websites. I remember reading back at the time of the "one time mass amnesty" for illegals the feds pulled in the reagan era. The "esteemed social scientists" claimed there wouldn't be a flip flop on demographics ntil around 2050 at the rates then, and the amnesty was promised to be carved in stone, that "the laws would be followed". Ya, that lasted a long time. And when will cal be an hispanic majority? In a few years now, something like that? Naw, that won't cause any more problems....
Back to the "net tax"--Like, who didn't see this coming? I can also see more restrictions on net access, up to probably licensing for admins and corporations who "use" the net. They'll get around to that sooner or later, because it allows a government another completely brand new layer of bureaucratic control, so they can sell you permit-ission slips. It's coming, you can smell
Re:That is the sound of inevitability.... (Score:1, Insightful)
Sorry, but the last news this past year I heard were largely Democrat congressmen calling for mandatory military service, not Republicans. Maybe you forgot to read your local newspaper, cross it with some CNN, blogging, and add some news.google.com and news.yahoo.com to it all to get a half-assed decent viewpoint.
Repubicans just have less of a problem sending such serviceman in to settle (of dubious value) conflicts (aka cowboy diplomacy *cough*).
One notable Congressman from NY made headlines, because he (to cut through the political shrouds) wanted everyone to "feel" the pain of minorities (a bullshit term, really meaning underrepresented minorities) before overrepresented in the military and because he was against direct action in the middle east.
What you say only stands because people remember the draft from over 2 decades ago.
"consenual adult-sex acts"
Adultery should be legal to some, I suppose. Yes, I know what you mean--gay rights. I tend to agree with you--the government should not be in the bedroom (as much as I dislike the acts of homosexuality, that's my problem, not the governments). Problem is, your party hasn't just settled on gay rights, it has also wants additional legal protection for gay marriages (which I actually do not have a problem with), gay adoption (no problem there either for me), and hate crimes (which I have a problem with, despite being a minority).
"recent Santorium flop"
As to Santorium, he was making a half-baked legal argument and, while half-baked, it was a valid comment and even opinion to hold. While Dems were all up in arms, as well as log cabin Republiancs, his argument was valid. To the Republicans, the Dems's response to his statmeents simply indicated that there was no room for open discussion. Thus the political wheels turn. Then again, a lot of Reps felt that way about Lott.
btw, I think you confuse Democrats with Libertarian. Dems do not have a hands off attitude. They, like the Reps, have a "better society" attitude and combat their idealistic vision against the other major idealistic vision.
I should note that as a Republican, I generally dislike Bush junior, think Cheney is okay (the Halliburton crap is overextended), and think Ashcroft is a disgrace. I'm also an agnostic (similar to atheist to some), because I interpret establishment of religion as that, establishment. I don't think "under god" should be in the Pledge of Allegiance, but also do not think it is illegal for it to be there.
Re:Money's a drug (Score:1, Insightful)
I may be wrong on this one, but, I've heard they can even vote...is this true?
But, they do get 'welfare'....in all types of services. We need to regulate our borders, and allow for legal immigration....or even work visas...but, regulate it versus the free-for-all it is now. Hard to budget without knowing what the numbers are supposed to be...
And in my original post, I didn't say this was the ONLY problem, just that I guessed it was a good part of the problem....I do agree on the corruption and price fixing such as with the energy fiasco being a major problem....just didn't list them all...only the first ones that came to mind....and with it being in the news a lot, the illegal immigration problems came to mind first.
your government at work (Score:3, Insightful)
If we're going to have a sales tax then we should have no state income taxes. If we're going to have a federal income tax there should be no additional social security charge.
People have let the government become a crutch and in the long run this does more harm than good. It's like a crappy parent who sends their kid off with someone they don't know very well who ends up beating the shit out of their child. Sure that person will probably get what is coming to them but then the question also gets asked of the parents, "What the hell were you thinking to begin with?"
Re:That is the sound of inevitability.... (Score:3, Insightful)