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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2/21/2013 2:03:10 PM
From the sound of your post, you don't live in California, so you don't know what you're talking about. Guess what? I do, and I can assure you our state is filled with the dumbest voters in the nation, who in turn elect the dumbest legislators.
Promise them any sort of freebie at their neighbor's expense, and they will vote for you. Drag a kid in front of any initiative, and they'll support it. They vote 100% of the time based on raw emotion without ever considering the economic impact of anything they do. Then they turn around and wonder why our state is a mess. It has to be one of the worst run states in the country, trust me.
As far as what to do? Here are a few solutions (that you implicitly think aren't valid).
-Cut the pay of every state employee that makes more than the Governor down to his pay level. For example, the current head of the local transit agency in my city makes as much as the President. Most university heads are in that range also.
-California has 1/10 of the nation's population, but has 1/3 of the welfare cases. Eliminating the welfare state would balance the budget overnight.
-Full legalization of pot, and cease all wasteful and expensive law enforcement activities prosecuting it.
-Eliminate collective bargaining (unionization) of all public employees, as well as pensions for all new employees.
-Use the savings to take the debt to ZERO (ignore the propagandizing of Wall Street shills telling us some debt is good).
-Begin to reduce taxes back to a reasonable level and stop using the working people of the state as a financial punching bag.
The problem is with pseudo-intellectual, defeatist, nihilists like yourself who simply throw up their hands and act like there's nothing we can do. There are plenty of solutions, just no guts to try them out.
2/25/2013 7:53:33 PM
I love the "some debt is good" line. It's already been played a few times here, see the Wiki links above explaining why we are not smart enough to understand.
I guess some debt is good if you're the one collecting the interest.
And the 'California Board of Equalization'?!? That sounds just a lil creepy.
California is a nice place to be, but no nicer than Florida, and we don't pay a state income tax.
2/26/2013 5:51:51 PM
Thanks half_duplex. I've never been to FLA, but have heard great things. A friend is moving there shortly, and I plan to go visit him and check things out. I'm seriously considering it as a new home. I'm done with this socialist third world welfare slum.
"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs
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