California Grabs $96.4 Million in First Round of Online Sales Tax Collection
February 20, 2013 7:11 PM
comment(s) - last by
This amount is strictly for the September-December 2012 quarter
Some U.S. states -- like California -- are starting to see new revenue from
sales tax on internet purchases
from the likes of Amazon.
The California Board of Equalization said it made $96.4 million in sales tax on internet commerce from September-December 2012, which is the first full quarter that the state started collecting. This is good news for the California Department of Finance, which has a forecast budget goal of $107 million in new e-taxes for the fiscal year starting July 1, 2012.
While these numbers look great for the state of California, they're a bit off from the estimates provided by a 2009 University of Tennessee study that said California would make $1.9 billion in 2012 revenue if it collected online sales tax. It also said states would miss out on $11.4 billion in 2012 revenue nationwide if they failed to collect online sales tax.
As of right now, Amazon collects sales tax in nine states (including California) and will collect in seven more over the next year.
Georgia is one the most recent to collect online sales tax. Amazon started collecting sales tax in Texas in July 2012, and California and Pennsylvania in September 2012.
Amazon has been fighting states that force it to collect sales tax for years (except in Kansas, Kentucky, New York, North Dakota and Washington). The e-tailer fled many states that attempted to force tax collection on the company, such as
and Illinois. But between states looking for ways to offset large financial deficits and brick-and-mortar stores like Best Buy complaining about Amazon being unfair competition, the issue swelled.
Amazon CEO Jeff Bezos said many times that his company would agree to collect taxes if there were some sort of federal legislation.
But eventually, Amazon finally broke down and started collecting sales tax in certain states, which allowed it to build more distribution centers within those states. For instance, Amazon announced that it would
collect sales tax in New Jersey
last May so that two Amazon distribution centers could be built. This led to faster shipping for customers, such as
Amazon's same-day delivery
program, making it more competitive than ever.
But earlier this month, Amazon and Overstock.com challenged a New York law passed in 2008, which forces companies with affiliates within the state to collect sales tax. However, Amazon said
this law is unconstitutional
because a 1992 Supreme Court decision said retailers that don't have a nexus of operation in a state does not need to collect sales tax. While New York said that websites with purchase buttons for Amazon as well as other national retailers are local solicitors because they receive fees for doing so, Amazon said argued that web referrals are less like solicitors or a local sales force and are more like advertising.
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RE: Why the difference?
2/21/2013 10:33:48 AM
Of course I don't. Nobody does!
That is the problem - if people would pay what they are currently obligated to pay, this would not be an issue. Everybody only cares about what is in it for me. This change is simply enforcing current laws that nobody is following.
If you don't like how the government is run, then get elected and change it, get involved. If you don't think sales tax is, right, propose a new system. Show what cuts you would make. When people start starving to death, dying from not getting needed medication and medical help, and such, own up to it. Be big enough to say tough luck. Problem is, you will not be elected if that is your stance, and they all know it.
I don't live in California, and never will, but if you look at what they pay into the federal goverment, it might shed some light on why they are broke. They are paying for other states that live off the federal government. There are numerous states (coincidentally almost all of them are so called red states) that take quite a bit more from the federal government than they pay in, while also whining about how much they are paying in taxes.
If we cut the size of the goverment, many of these states would SOL, as they would not be given free money. Nobody wants that, cause then they would have to actually be responsible themselves.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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