Say Goodbye to Tax Free Shopping
Over the past 10 years more Americans have found that shopping online is not only convenient but most times less expensive than buying products in an actual retail store. Another incentive of shopping online at sites like Amazon was that items were tax free. So not only were you getting a great deal, but you were saving even more cash by not having to pay tax.
Well if you live in California you can kiss those days good bye! Because earlier this month California’s State Assembly approved a new bill that would require Web retailers such as Amazon.com Inc to collect sales tax on purchases made online by Californians.
Assembly Bill 155, which now moves on to committees in the state Senate, expands the definition of “retailers engaged in business in the state” in a way that would require Amazon and others to collect sales tax.
The California Board of Equalization estimates this new tax could bring $83 million to the state. This is in effort to bring more revenue to California which is already an estimated 10 billion dollars in debt.
California’s Assembly approved the bill on a vote of 52 to 20, showing that the majority agree to find new ways of generating more income into the financially slumped state.
California is one of the first states to introduce this new bill, but soon enough we may be finding other states following in its footsteps.
RIP Tax Free Amazon.com and internet retailers.
This is typical politics–in the name of a little tax revenue, these politicians are going to put an extra burden on every e-commerce site everywhere. They fail to think of the costs and externalities they will cause which will likely _reduce_ their tax revenue.
The existing sales tax law (each online store collects sales tax for locations where it has a presence) is adequate. Every state gets its share based on the companies that find it an attractive place to set up shop.
Anyone who makes regular major purchases over the Internet in California will start thinking about moving out of the state to avoid this new cost.
If I owned an online store, I wouldn’t want to hassle with setting aside and sending in money to California. It would be even worse if lots of states and governments did this. A lot of stores will either ignore this new law or quit selling to Californians.
Good luck enforcing this, California. In order to enforce these new taxes, California is assuming it has jurisdiction to regulate interstate commerce. I’m sure the federal government will really like that! Assuming they are allowed to do this, the cost of enforcement will likely negate a huge portion of the extra revenue.
The Internet has worked so well because of its openness, freedoms, and low costs. Governments should stay out of the way and enjoy the extra income and property tax base that Internet-based companies are already providing them!
Why should california get a cut of the sale? They don’t have to provide services for online sales. They don’t have to provide police protection and fire service like they do for a bricks and mortars store.
Just plain greedy.