Nearly a year ago, we wrote that supporting efforts to boost collection of sales taxes due on electronic purchases from out-of-state retailers ought to be a “no brainer.” It is still a no brainer and we’re baffled why anyone would oppose efforts to limit tax breaks only available to businesses that don’t employ Californians and don’t invest in California. A column published yesterday by the Sacramento Bee discusses behind-the-scenes lobbying efforts by Amazon.com to defeat legislation passed by the State Senate last week that would take a small step toward eliminating the preferential treatment of out-of-state retailers.
To repeat what we said a year ago, at a time when California faces significant budget shortfalls and California retailers face declining sales, you’d think a bill that makes it possible for the state to collect taxes that are legally owed and limits the incentive to buy from businesses that don’t employ a single Californian would be greeted with open arms. Unfortunately, there’s still reason for concern. The current measure won’t erase the entire $2 billion to $5 billion gap attributable to untaxed Internet sales – that would require Congressional action overturning the 1992 US Supreme Court decision in Quill Corporation v. North Dakota – but it would raise about $107 million that could be used to help balance the budget. That’s enough to restore the Governor’s proposed reductions to the Healthy Families Program, which provides low-income working families access to affordable health coverage for their children.
And, for the record, unlike Bee columnist Dan Morain, I don’t own an Amazon Kindle and wouldn’t even consider buying one until Amazon does the right thing and collects the sales tax its customers already owe on their purchases from the Seattle-based behemoth. iPad anyone?
– Jean Ross