Monday, April 18, 2011

Sales Tax on out of State Internet Companies/SB 826

I have written about the tax on out of state Internet companies like Amazon but in the context of AB 153[Skinner].

There is a bill in the Senate SB 155 which would essentially do the same thing. The difference in the bills is that the Skinner bill revolves around nexus . That is that the affiliates for Amazon and other Internet companies would be considered having a nexus and therefore Amazon would be required to pay the tax. SB 155 does not have that provision but says:

“Any retailer that is a member of a commonly controlled group,as defined, and is a member of a combined reporting group,as defined,that includes another member of the retailer”s commonly controlled group that performs services in this state in connection with tangible personal property to be sold by the retailer. Qualifying services include, without limitation, the design and development of TPP sole by the retailer or solicitation of sales of TPP on the retailers behalf”

Bottom line both would impose a tax on out of state retailers like Amazon and Overstocks.

Small Business California supports both.

Dick Durbin Senator from Illinois will be proposing an Internet tax in the Senate I believe April 15. This will be I think a long battle and may not pass so we need to focus on getting something in California.

Small Business California is sponsoring SB 826[Leno].

Yesterday the Senator introduced this bill in the Senate Labor and Industrial Relations Committee. This would impose a minimal penalty on claims administrators who do not file claims information to the Workers Compensation Information Service. Right now it is estimated that somewhere between 15% and 25% of the claims information is not being filed or filed without the proper information. This is important because workers compensation policy is determine by this information.

I am pleased to report that we were successful in getting this passed with no opposition votes. This in spite of the fact that the California Chamber of Commerce, California Manufacturers Association the California Association of Joint Powers Authority and the California Coalition on Workers Compensation had come out opposed last Friday.

We were supported by the California Labor, the Applicant Attorneys and most important an organization representing claims administrators who would be the recipient of the fines. The Insurance company association did not oppose.

While we have not completed our discussion with the opposition groups they backed off their opposition awaiting the results of a compromise of the specifics of how the fines would be levied. It is our position that we do not want this to be punitive and are not interested in technical violations we just want to have good data. For your information the fines were $100 for a violation up to a maximum of $5000 a year.

Thank you Senator Leno.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

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