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.
That is the sound of inevitability.... (Score:5, Interesting)
time in coming. When it comes to the government and collecting
"their" money, they won't let any opportunity pass them by.
It will be interesting to see how this will impact online
retailing though. Not having to pay sales tax has been helpful
to sites like Amazon for keeping their costs lower than brick
and mortar stores. Although I think many people don't figure
the cost of sales tax into the purchase of an item as frequently
as they should (I know I don't), so it may not have that large
of an effect.
One interesting sales tax law in my home state (Utah) is that if
you buy something from a state that doesn't have sales tax
(Oregon) then you have to pay sales tax to Utah. Just one of
the lovely little "bend over and grab your ankles" type of laws
on the books. I'm hopeful they won't enact the same type of law
for internet commerce, but I don't have much hope.
moving on out? (Score:2, Interesting)
Mike
What would be cheaper... (Score:5, Interesting)
Integrating a system to charge, process and report state taxes, and losing business due to your higher prices,
OR:
Moving away from california.
Re:That is the sound of inevitability.... (Score:5, Interesting)
Double Taxed? (Score:3, Interesting)
Tax Fast Food (Score:5, Interesting)
However, I think that this internet tax does not have the same kind of reasoning. The internet is bringing revenue in for the state and now the state is trying to find a way to make more money.
Heh (Score:3, Interesting)
Thank Gray Davis and his complete incompetence, but don't forget to give a shout out to the hippies and celebrities who hold so much sway out there.
I swear to god, there's something wrong with people's heads in that state. I've mentioned before I write police software for a living, and we have some California sites.
Most municipalities out there have this screwed up system for dealing with false alarms, and it all boils down to: after the seventh alarm, your permit is revoked, you're charged with being a public nuisance. Both of which make some sense, but get this, the police are to no longer respond to your residence.
I mean, any crooks in LA and it's surrounding counties, theres the hot tip o' the day. Find a business that has had seven false alarms within 12 months (thats a sliding window, not a calendar year), and it's free for the pickins! Smash the window, shoot the owner in the face, the police wont come!
All because some dipshit politician with his head up his ass thought that the police refusing protection to citizens would be a great cost-cutting measure.
Of course, the police will still show up. They cant afford not to, there are too many liability issues (imagine the feeding frenzy if some clerk bled to death on the floor of a 7-11 because the police wouldnt come out for alarm #8).
Bah, that states done. You could fill a library with stupid laws and idiotic political moves in california. Cecede and form Moronia, already.
That is a tax on the poor, no way (Score:4, Interesting)
Re:What would be cheaper... (Score:3, Interesting)
OR:
Moving away from california.
Seems the best business decision is to abandon the state that ranks first in total population, tenth in per capita income, and fourteenth in per capita disposable income. Indeed, only a fool would want to conduct business in California, a state which accounts for 12.8% of the total disposable income in the United States.
Source: http://www.bea.gov/bea/regional/spi/
Wonder what this will do to Online games? (Score:2, Interesting)
Re:uh.. (Score:2, Interesting)
In WI and I believe just about every other state, we have something called "use tax". Basically it allows the WI IRS to creatively get around the law that prevents states from taxing out of state purchases directly. I know it is a sales tax, the WI IRS knows it is a sales tax, but they call it a use tax. You pay the use tax when you file your taxes for the year.
Re:That is the sound of inevitability.... (Score:3, Interesting)
It's not net sales, it's interstate sales. If you ever buy something online from a company that ships it from your same state, your liable for sales tax according to that state's laws. But once the product crosses state lines, that's interstate commerce which, according to the U.S. Consititution, only the federal government can regulate. Not all businesses *do* charge for same-state online purchases, even though they're legally expected to do so. They just haven't been caught.
This has applied forever to catalog sales, but the recent boom in Internet commerce has made it a much bigger financial loss for businesses in certain states. The net result, I imagine, is that businesses that can afford to will simply move their warehouses to Nevada or some other state that lets them offer better deals to their customers. (Mind you, this will probably be fewer businesses than you might hope.)
They don't--if the business is in another state (Score:3, Interesting)
Don't tax you; don't tax me;
Tax that other guy behind the tree.
Btw, if we want to reduce multiple taxation in the US, why don't we replace sales and business income taxes with a VAT (value added tax, which taxes the difference between revenues and costs per item)? It accomplishes the goals of both taxes more smoothly and is harder to evade.
Re:moving on out? (Score:5, Interesting)
Re:Money's a drug (Score:0, Interesting)
Isn't this the way things are already? (Score:3, Interesting)
Every company I've ordered from in California charges California sales tax for California customers. The Cornell Campus Store in Ithaca, NY charges 8% sales tax within Tompkins County, 4ish percent elsewhere in NY State, and 0 tax elsewhere. (It seems like NYS has independent state and county sales taxes.)
Re:That is the sound of inevitability.... (Score:2, Interesting)
Gray Davis' solution to this was to buy electricity in large blocks, coinciding with the peak of the market, to essentially subsidize per KWH rates to consumers, rather than allow the market price of electricity to float with the costs. Much the same as price controls on gasoline caused shortages in the 70's. Had the price not been controlled, the users with the highest consumption would have been forced to cut back their consumption or make themselves more efficient.
Granted, price per KWH went up drastically, but it's not just the greedy bastards who own the power generators who were at fault. The self-centered politicians who prevented (with the enthusiastic support of certain pressure groups) construction of new power generating facilities in-state, who refused to permit construction of power lines from out of state, the large industrial users who were getting power at subsidized (rather than real) rates, and so on.
There's plenty of blame to spread around, in other words - but the taxpayers of California are taking it on the chin for the state's malfeasance. Again.
Glad I don't live in CA, though I do live in a state where the 1990's spending hangover in the state legislature is just beginning to rear its ugly head, and both Republicans and Democrats are vying to figure out which tax they ought to raise to solve their problem.
Re:That is the sound of inevitability.... (Score:1, Interesting)
Re:That is the sound of inevitability.... (Score:3, Interesting)
It's just that most people (unless they are businesses) don't ever bother.