California to online retailers – it’s time to collect sales taxes

Online businesses are booming, but consumers in California may soon have one less reason to order their books and iPhones online. On Tuesday, the California state Assembly passed a bill that would require online retailers with a physical presence in the state or that work with brick and mortar stores to add at least a 8.25 percent sales tax to online purchases. Proponents are hoping the measure would bring in $83 million a year in revenue just from Amazon alone and help consolidate California’s broken budget. Businesses with store fronts and inventory are in favor of the bill that passed 47-16. They claim it will help them compete with Internet giants like Amazon. In 2009, then-governor Arnold Schwarzenegger vetoed a similar bill. Amazon threatened to end relationships with more than 10,000 affiliates in California should the online tax bill pass the state Senate and get the Governor’s signature. Critics of the new initiative fear it would drive businesses out of California. Will you still buy online if the sales tax becomes law?

Online businesses are booming, but consumers in California may soon have one less reason to order their books and iPhones online. On Tuesday, the California state Assembly passed a bill that would require online retailers with a physical presence in the state or that work with brick and mortar stores to add at least a 8.25 percent sales tax to online purchases. Proponents are hoping the measure would bring in $83 million a year in revenue just from Amazon alone and help consolidate California’s broken budget. Businesses with store fronts and inventory are in favor of the bill that passed 47-16. They claim it will help them compete with Internet giants like Amazon. In 2009, then-governor Arnold Schwarzenegger vetoed a similar bill. Amazon threatened to end relationships with more than 10,000 affiliates in California should the online tax bill pass the state Senate and get the Governor’s signature. Critics of the new initiative fear it would drive businesses out of California. Will you still buy online if the sales tax becomes law?

Guest:

James Nash, Capitol reporter for Bloomberg News