California Democrats are about to initiate a big effort to ram through bills that would force out-of-state, online-only retailers with no physical presence in the state to collect and remit to California sales/use taxes. Starting with a press conference today, they are pursuing three different approaches.
The first is Assemblywoman Nancy Skinner’s AB 153, otherwise know as the affiliate nexus approach. As previously reported, the bill would force out-of-state online-only retailers who use websites based in the state– including eBay– to advertise to collect and remit California sales and use taxes. Amazon and Overstock have threatened to terminate affiliate contracts to keep themselves out of California’s tax net if this bill passes.
The second, deeply problematic bill is SB 234 which enacts “long arm” nexus and allows the Board of Equalization (BoE) a virtual unfettered ability to force anyone it wants, no matter who or where they are, to collect and remit to California sales and use taxes. Critics charge that in addition to enabling tax-hiking and the imposition of new taxes, and extending massive authority to the BoE, if this bill becomes law, it will provoke costly litigation that California is likely to lose.
The third is a relatively undiscussed measure, pushed by Assemblyman Calderon.
Skinner and Calderon’s bills are set to go before an Assembly committee on Thursday. But all three bills could potentially be up for vote on the Assembly floor in a relatively short time-frame thereafter.
The Quill v. North Dakota decision by the Supreme Court indicates that all of this legislation is unconstitutional.
Opponents believe so-called Amazon tax proposals such as these, if enacted, could have a serious, negative impact on the state’s economy and its fiscal outlook.
California currently suffers from 11.7 percent unemployment; its budget gap remains considerable.
California Democrats are about to make a big effort to ram through bills that would force out-of-state, online-only retailers with no physical presence in the state to collect and remit to California sales/use taxes. Starting with a press conference today, they are pursuing three different approaches.The first is Assemblywoman Nancy Skinner’s AB 153, otherwise know as the affiliate nexus approach. As previously reported, the tax would force out-of-state online-only retailers who use websites based in the state– including eBay– to advertise to collect and remit California sales and use taxes. Amazon and Overstock have threatened to terminate affiliate contracts to keep themselves out of California’s tax net if this bill passes.The second, deeply problematic bill is SB 234 which enacts “long arm” nexus and allows the Board of Equalization (BoE) a virtual unfettered ability to force anyone it wants, no matter who or where they are, to collect and remit to California sales and use taxes. Critics charge that in addition to enabling tax-hiking and the imposition of new taxes, and extending massive authority to the BoE, if this bill becomes law, it will provoke costly litigation that California is likely to lose.
The third is a relatively undiscussed measure, pushed by Assemblyman Calderon.
Skinner and Calderon’s bills are set to go before an Assembly committee on Thursday. But all three bills could potentially be up for vote on the Assembly floor in a relatively short time-frame thereafter.The Quill v. North Dakota decision by the Supreme Court indicates that all of this legislation is unconstitutional. Opponents believe so-called Amazon tax proposals such as these, if enacted, could have a serious, negative impact on the state’s economy and its fiscal outlook.
California currently suffers from 11.7 percent unemployment; its budget gap remains considerable.
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