California Assembly Approves $1 Billion "Internet Tax"

[fuzzygenius]

I'm interested to see how this will work. Does everyone have to pay or only residents of the state? As a New York resident I do not feel I should have to pay for California's out of control budget (I already pay for New York's out of control budget) just because I shop with Amazon.

Furthermore, if everyone has to pay whats to stop all states from doing this and levying a tax on any internet purchases if a company resides in said state. Say Giant Sales Company Alpha (GSCA) has an office in California, Ohio, Florida, and New York. Would a consumer in Idaho have to pay all four sales taxes just because the company has several offices?

I will also be interested to see if it works. From what I've heard, it can't, really. If you're in CA and buy something from a company with offices in CA, then you owe sales tax, but that's been happening already (as a few people have reported). If you're in CA and you buy something online from a company out-of-state, then CA has no jurisdiction over that company, and the onus to pay falls on the consumer - which is the same as it has been (and no stopping such shipments at the border - violates the constitution). And if you're not in CA but the company is? They might get away with forcing the CA company to add sales tax and paying up, but that's technically a regulation of interstate trade, and only Congress has the power to do that.

In short, I don't see how this can change the current status quo AND pass legal muster.

What's funny is that I've consistently heard that a fix isn't that hard - get the federal gov't to pass a law allowing the collection of state sales taxes from online retailers, based on the customer's location. But, the online retailer lobby is huge, and Congress tends to get bogged down with other stuff.

 

[AngryMongoose]

I must be missing something here. They planning on taxing companies that live just in that one state? What's to stop them, say, shifting their offices a few hundred miles down the road? Or their manager? Or their in-name manager on tax forms, who happens to be the de-facto managers pet?

 

[Falqour]

This is a really messy issue, which is why nothing much has been done about it.

As someone who programs shopping cart software for online retailers, I can say that the current rules in place forces online retailers who ship products to customers who live in a state where the retailer has a taxable presence (office, mailing address, post office box, etc.) to have the website automatically charge that state's sales tax to that customer. Most online retailers already do that.

And really, that's as far as the law would allow states to go. Unless certain ratifications are made at the federal level, any state trying to collect taxes from a business located outside of their borders, whether they are selling products to their citizens or not, can be overturned by the Supreme Court. Similarly, any state trying to collect taxes from an individual not residing in their own state would also be illegal.

Now, if legal changes were made, and lets say that all online retailers must charge their own home state sales tax to all their customers regardless of where they are, this would be catastrophic for most states, since all online retailers would just relocate to the state with the cheapest or non-existent sales tax to get an edge against competition that charges sales tax, (Hello, Oregon) in much the same way many businesses incorporate in Massachusetts, but don't actually reside there. (because corporate law in MA strongly protects corporations)

If done the other way, in that businesses were forced to collect sales tax from all their customers at the customer's sales tax rate, that would effectively kill online retail. The cost of just the paperwork involved in maintaining tax rates on the web site, filing the necessary forms with the revenuers of not just all 50 states, but each municipality in the US that adds sales tax locally, would be enough to bankrupt most online retailers. And that's not even considering international sales.

I think the only legal thing legislators could possibly get away with would be to add a Federal Internet Sales Tax, which would be added to all orders and handed over to the federal government. This, of course, would be on top of local orders that are already charged sales tax. Of course, states wouldn't really care about this unless the money collected was doled out to the 50 states in some way, which it could, but I doubt a system could be put in place that would appease everyone.

 

[GrimTuesday]

I love living in Oregon.

No sales tax here

Although they compensate by having really high property taxes and income tax. *sigh*

And I love living in Southwest Washington, where I can drive down to Portland an buy things tax free (except for things like cars.).

Can't say I'm too upset about this. I'm in favor of this because with the amount of shopping that is done online these days, it's a huge hit that states with an income tax are taking. This way you can't circumvent your states taxes simply by buying online.

 

[mjc0961]

Americans are all guilty of buying stuff online without paying the sales tax on it.

Written by someone who clearly doesn't live in New York. I've been paying taxes on Amazon purchases for years (since before Saints Row 2 came out, because I remember editing my shipping speed on my preorder and they added tax to the order when I did).

*snip*

Or all states could just get rid of sales tax because sales tax is bollocks. They already take income tax before we even see a dime of our money. Why the hell do they need to take even MORE when we spend it?!

 

[CardinalPiggles]

'Charles Calderon' is it?

grab your torches and pitchforks fella's, let's get him.

it looks like the poor will only get poorer. i would say fire that bloke and all the other stupid democrats, then the state will have more money.

instead of giving it to them for their nice motors to go in their nice garages next to their nice homes.

 

[Royas]

I've always been charged sales tax when buying on the Internet from any company with a presence in my state. It's only when the company has no presence that they don't charge the tax. That's only because I wouldn't owe the tax to the state they are in, but rather to my home state. Online retailers literally can't keep track of all the taxes in every jurisdiction, and they sure can't afford to file the forms in every jurisdiction as well.

I'm not really sure I'm understanding exactly what CA is proposing here. If they are collecting taxes on sales to CA residents from CA companies, no problem. If they are trying to collect taxes on sales to residents of other states from CA companies, then they may run into that pesky interstate commerce clause. And if they intend to try to tax me if I buy from a CA company, good luck with that. I'm on the other side of the bloody country, CA doesn't exactly have any authority over here. So, it all depends on what CA is actually trying to do here.

 

[Johnnyallstar]

Man, I wonder when the people of Cali just up and move. Sure the weather is nice, but just how much can you take?

 

[Baresark]

LoL, money they are owed? All taxation is theft, so therefore, he is owed money that hasn't been stolen yet. Nice. I wonder how long people will be content to be fucked over.

I mean, I thought we were pretty much already charged tax for online outlets that had a presence in our state anyway. I know I get taxed from Newegg and Sony, and I'm in New Jersey. So, you get taxed for the item, if it's shipped USPS, you pay the government for that. And if it's shipped UPS or FedEx, then those companies are also taxed heavily by both the state and federal governments, and that cost is simply passed onto the consumer. Now, they will get sales tax for the few things that people may get from other states.

What's terrible is, California sucks for this type of thing, but it just gives other states the motivation to do similar things. That place needs an earthquake really bad, and I want no one harmed except for the politicians. The best part, how can anyone from California, who is not a politician, think this is a good idea. Your state will just take the tax revenue and spend more than it gets from it. And any taxation a company pays will in turn hinder that business from growing and expanding and creating new jobs. People don't win in this situation... ever. I hope someone out there understand that.

 

[Low Key]

we really need to just dump the sales tax and go with an income tax, sales tax tends to get most from the poor, income tax will get most from the rich and frankly fuck the rich

It depends on how you look at it. A rich dude buys a boat, he'll have to pay sales tax. There are plenty of write offs for income tax. Not only that, but tourists also pay sales tax, and there is a lot of tourism to California.

 

[Worgen]

we really need to just dump the sales tax and go with an income tax, sales tax tends to get most from the poor, income tax will get most from the rich and frankly fuck the rich

It depends on how you look at it. A rich dude buys a boat, he'll have to pay sales tax. There are plenty of write offs for income tax. Not only that, but tourists also pay sales tax, and there is a lot of tourism to California.

true but big buys like that are things you can write off on your federal taxes and really if a rich guy wants to skirt sales tax he can just go out of state, altho you are right about the tourist thing

 

[Worgen]

The republicans will save the day!

oddly enough down here is the republicans trying to do that sales tax thing

 

[samsonguy920]

Sucks to live in California. The one state with a GDP equivalent to nations, and yet it manages to remain bankrupt year after year. Gotta figure this was inevitable.

Glad I live in a state where an internet tax wouldn't work.

 

[SelectivelyEvil13]

we really need to just dump the sales tax and go with an income tax, sales tax tends to get most from the poor, income tax will get most from the rich and frankly fuck the rich

The fact that people of low to middle income support such legislation that only helps the rich is beyond me. The average person is pretty much forced into online shopping because brick and mortar has become so restricted in choices, deals to save every penny, and reliability for the cost.

As someone who actually recognizes the importance of taxes in our society, on this issue the government can ---- off. There are plenty of opportunities to tax justifiable sources, e.g. obscenely rich individuals with more expendable income than they know what to do with, corporations, um... corporations (General Electric, how much did YOU pay in taxes?). Let us not even delve into the massive failure to adopt new energy policies and our "reluctance" to shift military/foreign spending to a reasonable level. All I'm saying is, if Washington wants to see more of Mr. Franklin and his green fellows, how about not pissing what they already have down the toilet? Every American taxpayer has to balance their own personal budget, why should every level of government get to slack indefinitely on the same deal? After all, I don't know too many people who got their own bailout (and then went to court over not getting their bonuses after ruining companies).

 

[Deathfish15]

I love living in Oregon.

No sales tax here

Although they compensate by having really high property taxes and income tax. *sigh*

You said it right there. The income tax in this state is through the roof! And yet they're trying to put Sex Changes as something covered by state medical coverage (essentially us tax payers are paying for Gov Officials to get their freak on). WTF?




California is doing good with this change. They need to actually start charging Corporate America instead of giving it huge tax breaks. By giving these companies, companies which give their hundreds of thousands of employees near or at minimum wage while they continually increase their charges for products, tax breaks, they're stealing from America. And that's wrong!.

 

[darksakul]

I though Interstate locations/items are the Jurisdiction of the Federal Government
As International locations/items are the Jurisdiction of International Law and Treaties.

F.Y.I. The Internet is considered INTERSTATE as well as INTERNATIONAL.

How the hell does California have the Jurisdiction to make a Internet Tax.

 

[JMeganSnow]

.You know what they really need to do? BALANCE THEIR BUDGET. Even if this means cutting "services" across the board.

I agree 100%. But that will never happen. If you want to cut any program, you must listen to teh other side decry you for hating the poor or hating America

Yes, because if you think the government shouldn't pay for something, you must necessarily be against that thing. Don't want the government funding the arts? You must hate art. Don't want the government writing checks to poor people? You must hate poor people. But if you DO want the government stealing even more money from "other people" you're a "good citizen".

Bah.

 

[odd function]

If done the other way, in that businesses were forced to collect sales tax from all their customers at the customer's sales tax rate, that would effectively kill online retail. The cost of just the paperwork involved in maintaining tax rates on the web site, filing the necessary forms with the revenuers of not just all 50 states, but each municipality in the US that adds sales tax locally, would be enough to bankrupt most online retailers. And that's not even considering international sales.

This is not true. I have worked at a company that does just this. It is calculated automatically according to the billing address. I can verify that it did this for states, but I can't verify that it also handled county and city sales taxes even though the software had fields for them, since I never saw those in use.

That said, depending on sales tax is awful and California (and other state/local governments) should switch to income tax. Though the worst solution I've seen is the fees and levies added to utilities like water, by my local government that is too right wing to breathe the word taxes.

As someone who actually recognizes the importance of taxes in our society, on this issue the government can ---- off. There are plenty of opportunities to tax justifiable sources, e.g. obscenely rich individuals with more expendable income than they know what to do with, corporations, um... corporations (General Electric, how much did YOU pay in taxes?).

This is probably what you were getting at, but just in case.
https://www.nytimes.com/2011/03/25/business/economy/25tax.html
The number you are looking for is zero. Highest business tax rate in the world related rhetoric be damned. GE makes out really well under "oppressive" taxation.

 

[JMeganSnow]

How the hell does California have the Jurisdiction to make a Internet Tax.

In this day and age, when no government anywhere adheres to any sort of *principle*, they have "jurisdiction" to do anything they think they can get away with. This is one of the reasons why I think the idea of "states rights" as espoused by most Republicans--that being that the federal government doesn't have any authority to do anything that's not in the constitution, but states can do anything they want--is incredibly stupid. Replacing one unprincipled overbearing bully with FIFTY of them is NOT AN IMPROVEMENT. In fact it's worse, because reigning in the many interlocking and wildly different abuses of fifty little tyrants is a job nobody could realistically undertake.

 

[gyroscopeboy]

And here I'm used to sales tax always (ALWAYS) being included in the price, no matter if I'm shopping online or in a physical store.

Silly US of A.

(Yeah, having to add VAT to all the prices when I was in Los Angeles back in 2007 was annoying.)

Yeah i noticed that when i visited the US..i couldn't walk around and pay cash for small items (food, etc) coz i never knew if i had the right amount of change, because i couldn't calculate taxes on the fly!