Tags: Internet Giants Mull Calif. Pullout to Avoid Taxes

Internet Giants Mull Calif. Pullout to Avoid Taxes

Wednesday, 01 Jun 2011 10:45 AM

By Martin Gould

Internet companies such as Amazon and Overstock are threatening to pull out of California rather than collect state sales tax on tens of millions of dollars worth of business, the Los Angeles Times reports.

The move comes after the Golden State’s Assembly passed a law expanding the tax to Internet sales for companies that have a physical presence or sister companies with offices there.

The move passed the Democrat-controlled lower house on Tuesday on a 47-16 vote. It now goes to the Senate.

internet tax california"We're not imposing a new tax," the bill’s sponsor, Assemblyman Charles Calderon, said. "What we are suggesting is a way to collect a tax that goes uncollected."

"If you oppose this bill, you support tax evasion and are anti-business and are not listening to your constituents."

One Republican voted with the majority. The rest rejected the move saying it would drive business out of California and invite lawsuits. GOP Assemblyman Shannon Grove called the move “just another tax grab.”

Backers of the bill say it could raise $1.1 billion in new revenue for the cash-strapped state. They also say it would level the playing field, putting Web-based companies on the same footing as bricks-and-mortar stores that already collect the tax.

It would skirt a pre-Internet-age Supreme Court ruling that exempted companies from state sales tax if they do not have a physical presence in the state.

The state sales tax rate is currently 8.25 percent with local taxes adding as much as a further 2.5 percent.

Businesses with no physical presence in the state would still be exempt from collecting taxes, but Amazon would be caught up because an affiliated company makes its Kindle e-book reader in the state. Amazon said it would move production if the bill becomes law.

Amazon, Overstock, and other e-tailers have Californian affiliates that earn commission by referring business to the sites via web links. A second bill says any business generated through those links would be subject to tax.

© 2015 Newsmax. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
Zip Code:
Privacy: We never share your email.
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Mali's Islamists Withdraw Cease-Fire Pledge

Friday, 04 Jan 2013 13:06 PM

Tens of thousands of Fatah supporters rallied in the Hamas stronghold of Gaza on Friday for the first time since they we . . .

Fmr. CIA Director Hayden: Iran Nuclear Crisis Gets 'Scarier'

Tuesday, 17 Jul 2012 18:11 PM

 . . .

Join Fmr. CIA Director for Special Iran Briefing, Assess the Danger

Friday, 13 Jul 2012 12:27 PM

 . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved