Thursday, June 02, 2011

Internet Tax

Small Business California has been a strong supporter of having out of state Internet companies collect the sales tax on products bought in California.

To us it is a simple fairness issue leveling the playing field between Internet sales and brick and mortar stores. It also will reduce the administrative burden of small businesses as they will not have to keep track of their purchases and pay the use tax. The Board of Equalization has audited hundreds of thousands of small businesses on this issue over the last couple of years.

There are three bills dealing with this issue. In the Assembly Skinner AB 153, Calderon AB 155 and in the Senate Hancock’s S 235.

Calderon’s bill passed the Assembly 47-16 yesterday and Hancock’s bill passed last month. It is not clear to me if Skinners bill has passed the Assembly but if not it is expected to do so.

It seems that some if not all of these bills will get through the Assembly and Senate and go to the Governor. It is not clear whether the Governor will sign any of them. Governor Schwarzenegger vetoed past legislation.

The time has come to implement the collection of the sales tax on out of state Internet companies. For too long our brick and mortar stores have been put at a 9% to 10% disadvantage when competing with these companies.

What makes this interesting to me is the coalition that has been put together. Small Business groups and businesses like the big box stores. Politics truly do make strange bedfellows.

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

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