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Amazon Tax, California, California Citizens Redistricting Commission, Flap's California Morning Collection, Internet Sales Taxes, Tea Party
Flap’s California Morning Collection: August 3, 2011
A morning collection of links and comments about my home, California.For Central Coast Democrats, a prize and a problem
Democrats on California’s Central Coast were handed a rare prize last week when the Citizens Redistricting Commission created a Senate district with no incumbent and a 12-percentage point Democratic voter registration edge.
The race is already on to see who gets to claim the prize of becoming the party’s candidate, and it could be run on a track that is crowded, uncertain and potentially dangerous.
Three contestants have either reached or are approaching the starting line:
– Hannah-Beth Jackson of Santa Barbara, a former assemblywoman who lost a Senate race in 2008 by fewer than 900 votes in a district that was much less friendly to a Democrat. She says she’s “seriously considering” becoming a candidate. “I’m very much leaning in that direction.”
– Jason Hodge of Oxnard, a Ventura County firefighter and an elected commissioner of the Oxnard Harbor District. Hodge has been planning a run for the Legislature for months, has formed a campaign committee and begun raising money. He says he’s definitely running and has “a full expectation to raise $1 million for this primary.”
– Pedro Nava of Santa Barbara, a former assemblyman and onetime member of the California Coastal Commission. He says he hasn’t made up his mind, but muses that the Senate district “almost looks like someone drew it for me.” Nava says that by Labor Day, “Everybody should have a sense of what’s real and what’s possible.”
None says he or she would shy away from a primary race in which there are multiple Democratic candidates.
Tea Party picks up steam, demands further cuts
National Tea Party leaders in California were thrilled about one by-product of the political bloodbath over raising the federal debt ceiling: The fight showed that after two years of rabble-rousing from outside the Capitol, the Tea Party has real power to shape the debate in Washington.
Their challenge now that President Obama has signed the debt limit law: Can the Tea Party transform its government-shrinking mantra into long-term power, or will it be a one-hit wonder?
They’re not stopping to think about it. This month, Tea Partiers will storm town hall meetings of Republican and Democratic members of Congress and demand even more cuts. It’s the same strategy Tea Party groups used two years ago to protest – and ultimately water down – the health care reform law when they burst on the national scene.
“You’re going to see a lot of heat at those meetings,” said Mark Meckler, a Grass Valley (Nevada County) resident and co-founder of Tea Party Patriots, a national organization that called House Speaker John Boehner’s plan to lift the ceiling “an embarrassment.”
Tea Partiers say the debt deal didn’t cut enough federal spending, was crafted behind closed doors, and assigned responsibility for further cuts to a small, joint committee of Congress.
That heat will be stoked further on Aug. 27 in Napa, when thousands of supporters and at least two GOP presidential candidates are expected to attend a rally to start a Tea Party Express bus trip across the country. It will end in Tampa, where the group will co-host a Republican presidential debate with CNN.
Two years ago, the idea of the Tea Party co-hosting a debate with the self-proclaimed “most trusted name in news” was unimaginable.
Dan Walters: Remapping of California districts still on a rocky road
So the state’s new redistricting commission, after countless hours of hearings, discussions and mind-numbing exercises in specific line-drawing, has produced its almost-final maps of 177 legislative, congressional and Board of Equalization districts.
What now?
Partisan and independent analysts have cranked up their computers, and their scenarios generally agree that the proposed districts, which need one more commission vote this month, would result in a Democratic gain of congressional seats and give Democrats a strong chance to claim two-thirds majorities in both legislative houses.
Whether those conclusions become reality, however, would depend on what happens in “swing” districts – those potentially winnable by either party – in the 2012 and 2014 election cycles. And their dynamics would be affected by the new and untested “top two” primary system.
It’s “would” rather than “will” because it’s uncertain whether the Citizens Redistricting Commission’s maps will actually go into effect, since they are subject to attack by those – Republicans, mostly – who believe they got the shaft.
Critics could challenge the maps by referendum – collecting signatures to put them on the 2012 ballot – and if a referendum qualifies, the state Supreme Court would adopt temporary maps for the 2012 elections.
It could simply decree that the commission’s maps be used for 2012 while voters decide their permanent fate.
That’s what the court, headed by Chief Justice Rose Bird, decided when a Republican referendum challenged the 1981 maps adopted by a Democratic Legislature and then-Gov. Jerry Brown – a ruling that fueled a drive to oust Bird in the 1986 election.
Or the Supreme Court could draw its own maps, as it did to break redistricting stalemates after the 1970 and 1990 censuses.
Attorney general, FPPC asked to investigate identity theft ads
The state attorney general and California’s campaign watchdog agency have been asked to investigate a new labor-backed group telling voters that signing initiative petitions increases risk of identity fraud.
Carl DeMaio, a San Diego councilman supporting an effort to qualify a local pension reform measure, filed a complaint over the weekend with the Fair Political Practices Commission alleging that Californians Against Identity Theft is running afoul of state disclosure laws and “knowingly using false information to alarm voters and stifle the constitutionally protected rights of individuals” in the radio spots and website it launched last week.
In a separate letter, DeMaio asked state Attorney General Kamala Harris to investigate the ad and other activities he said are “undermining the initiative process” for San Diego voters.
As The Bee reported Friday, the organization behind the ads has received funding from the California Building and Construction Trades Council. The secretary-treasurer of the group, a retired attorney who formerly represented the union, declined to identify other contributors Friday. He said Californians Against Identity Theft, which has not filed a campaign committee, has been incorporated as a 501(c)4 nonprofit.
Californians Against Identity Theft’s 60-second radio ad, which is airing on stations in Sacramento and Southern California, urges listeners not to sign initiative petitions.Organizers say the effort is intended to educate the public about a need for more regulation of the initiative system, particularly the paid-signature gathering industry. But the ad came under fire Friday from good government and consumer advocates who said its claims were largely unsubstantiated and the timing sparked questions about whether the real goal of the campaign is to derail efforts to qualify measures circulating for local or statewide elections.
Attorneys for a statewide proposal to overturn a new online sales tax collection law have also taken aim at the effort, asking radio stations to stop airing the ad amid concerns that it is “filled with false and misleading statements.” The “Amazon Tax” referendum is one of several high-profile measures currently collecting petition signatures to qualify for the 2012 ballot.
Enjoy your morning!
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California’s Online Marketers Hit Hard by Amazon Internet Sales Taxes
It is just starting.But for the thousands of affiliates in the state now set adrift by Amazon and Overstock, another major out-of-state player, the law is an unfair and misguided attempt to raise revenues on the backs of struggling mom-and-pop businesses.
Rather than bring in tax dollars, they say, it will instead drive away scores of entrepreneurs California needs to innovate its way out of its economic malaise.
“None of us are against a level playing field,” said Robert Smahl with privately held Ebates, an online shopping site in San Francisco with 50 employees. “But this is not the way to do it. You’ve just penalized a small segment of people who don’t have the money to fight the legislation. I don’t think the lawmakers understand that this won’t change anything and it won’t hurt Amazon at all.”
Many affiliates getting hurt are pint-size, like Silicon Valley mom-blogger Tina Case’s Moms Who Click, a camera-buff site that brings in a few hundred dollars monthly.
Her husband works, so she’ll simply lose “the icing on the cake.” Still, she’s angry.
“The law is ridiculous. If the purpose is to generate tax revenues, then by putting affiliates out of business the state’s losing the income taxes we were paying. This will hurt the economy more than help it.”
More than 70 affiliates have already left California, say fellow site-owners, in some cases after being wooed by states such as Texas and Arizona that are anxious to reel in business-tax revenue to shore up their own battered budgets. Other affiliates are brainstorming new business models that would allow them to keep their sites up and running. And still others are waiting to see if an Amazon-backed initiative to roll back the law makes it onto the ballot early next year.
Keith Posehn, a San Diego marketer who’s considering leaving the state after losing 30 percent of his revenue, says the new law complicates an already cutthroat business.
The largest of online marketers will leave California and set up across the border in Nevada or Arizona. Others will just absorbed reduced earning capacity and spend less and hope the law changes.
In the meantime, the “little guy” gets hurt while the Big Box Brick and Mortar stores duke it out with Amazon in the political arena.
But, don’t say I didn’t tell you so months ago.
By the way, this issue of internet sales taxation will not be settled until there is some federal legislation or a decision by a federal appellate court on the nexus issue.
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California State Board of Equalization Votes to Begin Rule Making to Implement the Amazon Internet Sales Tax
Why the Board is proceeding and wasting taxpayers money on a law that will face a referendum is pure Democratic politics.
But, oh well.Debate over the 90-day interim period during which Amazon gathers signatures for the voter referendum to repeal the law was a hot issue today between board members. Because the office of legislative counsel issued a recent opinion which said the law would be suspended the minute Amazon qualifies the issue for the ballot, Republican board members George Runner and Michelle Steele
said the BOE should not implement the tax yet.At issue was whether the new law would or should even take effect.
However, board members Betty Yee and Jerome Horton, Democrats, insisted that because ABx1 28 was already signed into law, it needs to be upheld by the board unless and until it is repealed either by the voters, or in a court of law.
Yee wanted to abandon discussion of the interim period, and instead pushed ahead for implementation of the tax, beginning with an “interested parties” process discussing the need for rule making to implement and clarify the provisions of the bill.
The Board voted 3-2, siding with Yee and Horton to have obtain an opinion from the Attorney General explaining how the referendum process will affect the tax, and to begin the meetings to discuss implementation.
This move is just the beginning of a long litigious process.
Signature gathering is on-going and it is just a matter of time before the referendum folks and the California Attorney General are sued to try to remove the referendum from the ballot – before and then after it qualifies.
The campaign consultants, communications strategists and the lawyers are all going to get rich while I no longer earn a few bucks from selling Amazon books and media on flapsblog.com.
Wonderful…..
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California State Board of Equalization to Discuss Implementation of the Amazon Internet Sales Tax
Today the California State Board of Equalization will meet at 10 AM.The state Board of Equalization will start to tackle how to implement a new law requiring major online retailers to collect sales tax on purchases made by Californians at its Sacramento meeting today.
But any solution for applying the so-called “Amazon Tax,” which was approved last month as part of the budget package backed by Democratic lawmakers, could be short lived. Opponents of the change have filed referendum papers to ask voters to overturn ABX1 28 in the next statewide election, a move that could pull the plug on the plan to generate revenue much sooner than 2012.
A Legislative Counsel opinion sought by Sen. Joel Anderson, R-Alpine, concluded that the law would be suspended once the challenge qualifies for the ballot, even though the majority-vote measure took effect immediately as a result of Proposition 25. That scenario would put the Amazon Tax on hold until the next statewide election, which will likely be held in June 2012.
The meeting will be webcast this morning here and the full agenda in Pdf format is here.
In the meantime, the signature gatherers are proceeding and the television ad mavens are busy.
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California Amazon Internet Sales Taxes Will Be Suspended When Referendum Qualifies for Ballot?
Looks like it, as per a new legal opinion from the Office of the Legislative Counsel.
Legislative lawyers believe that if a referendum on the new law requiring sales tax collection by online retailers qualifies for the ballot, the law will have to be put on hold until the voters have their say.If that opinion holds, it may raise the stakes for a budget written with an expectation of at least $200 million from the law in question.
“We are of the opinion that the operation of the statute would be suspended during that time period,” writes attorneys for the office of
the Legislative Counsel in a letter dated Friday to state Sen. Joel Anderson (R-San Diego).Anderson apparently asked for a legal opinion on whether the law, contained in ABx 28, would be operable should the newly launched campaign to overturn it via referendum gather enough voter signatures.
The six page letter (PDF) tackles an issue raised a few times before, and several times since, voters approved Proposition 25 in November: whether a majority vote budget and its related “trailer” bills are subject to referendum.
But, I am positive that this will be litigated once the requisite signatures are gathered.
Which I do not surmise will be too long with Amazon.Com’s deep financial pockets. With the polling already showing a likelihood that the referendum will pass, Walmart, Target and the other brick and mortar retailers will want to keep Amazon’s feet to the fire – and in legal fees.
Some have suggested that the budget and any related bill which includes an “appropriation” could, under Prop 25, may be immune from the referendum. In part, the quandary is linked to the California Constitution’s exclusion of “urgency statutes” (which go into effect immediately and require a supermajority legislative vote) and those “providing for appropriations.” Until Prop 25 lowered the budget vote in the Legislature, both seemed to apply to state’s annual fiscal plan.
“Before Proposition 25,” the opinion letter states, “the referendum was applicable only to statutes that did not go into effect immediately.”
But now, write legislative attorneys, the budget can no longer be considered exempt from referendum because Prop 25 didn’t explicitly say so. And while the constitution doesn’t expressly put a statute on hold once a referendum has qualified for the ballot, Legislative Counsel says the courts have nonetheless operated on that assumption.
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Poll Watch: California Voters Split on Internet Sales Taxes ( Amazon Tax) Referendum
For the second year in a row, USC Dana and David Dornsife College of Letters, Arts and Sciences is partnering with the Los Angeles Times for a public opinion poll about the state of California. Dan Schnur, director of the Jesse M. Unruh Institute of Politics, and Evan Halper, Sacramento Bureau Chief from the Los Angeles Times, discuss the amazon.com tax.According to the latest USC Dornsife/Los Angeles Times Poll.
California voters are split about new legislation that would require Internet retailers to begin collecting sales tax on online purchases, according to the USC Dornsife College of Letters, Arts and Sciences/Los Angeles Times Poll. This week, opponents of the so-called “Amazon tax” were given approval by Secretary of State Debra Bowen to begin collecting signatures for a ballot referendum to overturn the measure.
Conducted July 6-17, 2011, the latest USC Dornsife/Los Angeles Times Poll shows 46 percent of voters favoring the online sales tax as a revenue source to help balance the budget and pay for state services. Forty-nine percent opposed the measure, which would raise taxes and could hurt local businesses who sell products through online retailers such as Amazon.com.
This will be a costly media campaign and remember once the half million or so signatures are collected, the internet sales taxes are suspended until after the election. Also, the way the referendum is worded, voting NO means NO Tax – a clear advantage to the referendum proponents.
Now, whether Walmart and Target will team up with Big Labor and the Democrats to fight the referendum will be an interesting development. The early polling may scare them away from such a massive ad driven campaign though.
Stay tuned….
Non-white voters are slightly more likely than White voters to oppose the tax. Among White voters, 47 percent favor the tax and 49 percent oppose it. Among non-white voters, 43 percent favor the tax and 52 percent oppose it, including 57 percent of Black voters and 52 percent of Latino voters.
Younger voters are also more likely than older voters to oppose the tax. Fifty-nine percent of young men oppose the tax, as do a majority – 52 percent – of young women. (37 percent of young men and 45 percent of young women support the tax.)
Overall, 55 percent of young voters opposed taxing online purchases by California residentsand 41 percent support it. In contrast, 43 percent of voters over the age of 50 oppose taxing online purchases, and 52 percent support it.
Opposition to the sales tax correlated to online shopping habits. Among voters who do most of their shopping online, 61 percent oppose taxing online purchases and 39 percent support it.
But a significant majority of California voters — 82 percent — currently do little or no shopping online. Among voters who never shop online, 48 percent support charging sales tax for online purchases, and 45 percent oppose it.
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Amazon.Com Can Move Forward on Internet Sales Tax Referendum
And, so the campaign to repeal California internet sales taxes begins.Amazon.com can begin collecting signatures to overturn California’s new online tax collection law after state Attorney General Kamala Harris issued ballot language Monday for the retailer’s proposed referendum.
The retailer and its online allies will have until Sept. 27 to gather 505,000 signatures to qualify the referendum for the ballot. Should it qualify, the state would have to suspend its new sales tax law until voters decide on the matter next June.
The law, Assembly Bill X1 28, was approved by Democratic lawmakers and signed by Gov. Jerry Brown last month. It expands the definition of retailers required to collect sales and use tax on California purchases, and the budget relies on the measure to raise $200 million this fiscal year.
Amazon.com cut ties last month with 10,000 California affiliates who refer customers to the website. The retailer said that act was sufficient to avoid the new tax requirement, though state officials disagree.
Harris issued a ballot title and summary for the referendum late Monday, the last major hurdle for proponents. Secretary of State Debra Bowen must still issue an election schedule, but that is considered a perfunctory act.
Harris’ move was not a certainty. Democratic lawmakers have suggested the referendum is illegal under the constitution because it would challenge a budget bill that took effect upon signing. Assembly Majority Leader Charles Calderon, D-Whittier, warned last week that the referendum would face a legal challenge.
Now, over to Wal-Mart and Target who are Amazon’s REAL adversaries in this fight to tax the internet.
Undoubtedly, there will be a legal challenge to California Attorney General Kamala Harris’ decision. Going to court in 1…2….3……..
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California’s Amazon Tax Referendum Faces Epic Legal Battle
Dan Walter’s has the story here of the challenge to the recently enacted California Amazon Internet Sales Tax Legislation.But will the referendum run afoul of Proposition 25 – the 2010 initiative ballot measure, which public employee unions sponsored, to reduce the legislative vote margin on the budget and its trailer bills from two-thirds to simple majorities?
Before any ballot battle, the rivals are poised for a legal showdown.
The tax measure, Assembly Bill X1 28, appropriates $1,000 to the Board of Equalization for administration.
Democrats placed token appropriations in trailer bills to qualify for simple majority votes under Proposition 25, and one section of the state constitution says appropriations are not subject to referendum.
Two Democratic legislators declared Thursday that the referendum is invalid due to Proposition 25. But Amazon cites multiple declarations by Proposition 25’s supporters that it would not dilute voters’ referendum rights, plus an opinion from the Legislature’s counsel to that effect.
Last August, for instance, Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez issued a statement that, if Proposition 25 passed, it “will not allow a majority of the Legislature to use budget trailer bills to enact new ‘referendum-proof’ programs or requirements,” adding, “Any attempt by this or any future Legislature to circumvent this right would be in clear violation of California’s constitution.”
The Amazon petition is now before Attorney General Kamala Harris. She could conceivably declare it to be invalid under Proposition 25, thereby triggering a legal battle with Amazon’s attorneys attacking Proposition 25’s validity.
Harris is more likely, however, to clear the referendum for signature-gathering. But if and when Amazon submits the signatures for certification, the California Retailers Association is poised to challenge them under Proposition 25.
Either way the entire matter will head to the California Supreme Court where the referendum process will be examined under the precepts of Proposition 25. Then, there will either be an election and/or a federal court challenge.
These taxes will not be collected, nor shall the California treasury be enriched for a long long time.
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Amazon.Com Takes Internet Sales Taxes to the California Ballot Via a Referendum
I had some of this last night but now there is more, including some of the political calculus.Amazon.com, in a fresh attack on California’s new online sales tax law, is pushing a ballot referendum to have the law repealed.
The Internet retailer Monday called it “a referendum on jobs and investment in California.” The effort comes two weeks after the law was signed by Gov. Jerry Brown. It requires online merchants to collect sales tax on goods purchased by Californians.
Amazon hasn’t been collecting the tax. The Seattle retailer responded the day the law took effect by severing ties with its 10,000 California affiliates – individuals, businesses and nonprofits that earned commissions by referring customers to Amazon. Dozens of other online merchants have done the same.
A ballot referendum takes the California-vs.-Amazon fight to another level. Unlike the more commonly used initiative process, a referendum effort can produce much quicker results.
Referendums are used to overturn laws passed by the Legislature, and the new sales tax law would be suspended once the Amazon effort qualifies for the ballot, said Chip Nielsen, a lawyer working on the referendum. The next statewide election is scheduled for February, but a pending bill would move it to June 2012.
Amazon and its allies would need to gather around 505,000 signatures to put the measure on the ballot. In a statement, a company executive portrayed the referendum as a way to restore the retailer’s relationship with those 10,000 affiliates.
“At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away,” said Paul Misener, vice president of public policy. “Amazon looks forward to working again with tens of thousands of small business affiliates in California that were harmed by the new law’s effect on hundreds of out-of-state retailers.”
It is probably easier and less expensive to obtain 500,000 California signatures than pay the attorneys to wage a battle in court, since Amazon et. al. have a case pending in the New York appeals courts. This political move might buy them some time.
I would think that any federal suit would probably want to avoid the 9th Circuit which contains California and concentrate on a direct appeal to the Supreme Court if need be.
So, game on and note that the taxes are suspended once the referendum qualifies for the ballot -as if they were going to remit them to the state anyway.
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Amazon.com Files a Referendum to Ask Voters to Overturn California Internet Sales Taxes
After writing about this issue for months, I really did not see this coming.Amazon.com Inc. wants California voters to decide whether to overturn a new law that forces online retailers to collect sales taxes there.
A petition for a referendum was filed Friday with the state Attorney General’s Office so that voters can decide on the requirement, which was included in a state budget signed into law in late June.
The new law forces online retailers to collect California sales taxes by expanding the definition of having a physical presence in the state. The requirement now kicks in if an online retailer has a related company, such as a marketing or product-development arm, or affiliates in the state – individuals and companies that earn commissions by referring visitors to Amazon from their websites.
Passage of the law, which is projected to help the state collect an additional $200 million annually, adds California to a growing list of states that have turned to such measures in hopes of bringing in more tax revenue. Its legislature passed a similar law in 2009, but then-Gov. Arnold Schwarzenegger vetoed it.
Billions of dollars are at stake as a growing number of states look for ways to generate more revenue without violating a 1992 U.S. Supreme Court ruling that prohibits them from forcing businesses to collect sales taxes unless the business has a physical presence, such as a store, in that state. When consumers order from out-of-state retailers, they’re supposed to pay the tax that is due, but they rarely do and it’s difficult to enforce.
States are trying to get around the Supreme Court restriction by passing laws that broaden the definition of a physical presence. Online retailers, meanwhile, are resisting being deputized as tax collectors.
Amazon had thousands of affiliates in California, which received fees varying from 4 percent to 15 percent of each sale they brought to the company. Amazon, which is based in Seattle, cut ties with them after the law’s passage.
Paul Misener, Amazon’s vice president of public policy, said the referendum supports “jobs and investment in California.”
“At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away,” he said.
I thought Amazon.com et. al. would be headed to court rather than the political arena which in California will certainly be expensive – more expensive to gather signatures for a referendum and then a television, plus direct mail campaign to overturn the law. But, it will certainly give the California GOP an issue to run on in 2012.
Maybe they will do both?
I will have the links to the exact language of the referendum and post some updates when they are available.