Tags: california | internet | tax

California Democrats Want to Tax Internet

Wednesday, 15 Jun 2011 06:11 PM

 

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Democratic lawmakers in California trying to pass a state budget by a Wednesday deadline are considering forcing Internet retailers like Amazon.com to collect sales taxes, cuts at universities and one-time accounting moves to help close a deficit of about $10 billion.

Details of the plan emerged from lawmakers' aides as the state Senate and Assembly prepared to vote on a budget blueprint crafted by Democrats who control both chambers.

Voters last year changed budget rules to allow lawmakers to approve a state budget by a simple majority -- which Democrats have -- so long as taxes are not raised, and instituted a rule that they don't get paid after their budget deadline until a state spending plan is passed.

With no sign of support from the handful of Republicans necessary to pass Governor Jerry Brown's plan to put tax hike extensions to a statewide vote, Democratic lawmakers this week moved on to their back-up budget plan.

It involves a requiring online retailers like Amazon.com to collect sales tax to provide a $200 million boost for the state's revenue, allowing the local sales tax to rise by 0.25 percent, which only requires a majority vote, and spending cuts on top of $11 billion in cuts and other moves approved in March.

The plan also involves billions of dollars in delayed payments for education and rosy revenue assumptions, including revenue from the sale of state buildings opposed by Brown.

The Democrats' plan would leave a reserve of about $600 million, compared with the $1.2 billion reserve Brown urged.

Brown, a Democrat, had said he would not sign a budget laden with accounting gimmicks and one-time moves that state leaders have routinely employed over the past decade to balance the state's books, but this week he suggested he may be open to an expedient budget.

The Democrats' budget for the fiscal year starting on July 1 shelves the tax extensions they and Brown had hoped for and that he wanted to ultimately put to voters.

Findings of a Field Poll released on Wednesday cast doubt on voters rallying behind Brown's plan to extend tax increases, meant to help balance the state budget over the near term and bolster the state's finances in future years.

Voters by 52 percent to 44 percent would extend tax increases temporarily to balance the budget but the 8 point plurality is down from 24 percentage points in March, Field Poll findings showed.

Moreover, voters by 59 percent to 38 percent oppose higher taxes to help the state balance its budget, according to the poll of 950 registered voters surveyed June 3-13.

(Editing by Cynthia Osterman)

© 2014 Thomson/Reuters. All rights reserved.

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