California Amazon Internet Sales Tax Referendum Gaining Momentum

Posted Posted in Amazon Tax, Internet Sales Taxes

It seems that the signature gatherers are having little trouble obtaining voter signatures to place the issue on the ballot.
Despite radio commercials that try to scare voters not to sign ballot petitions, signatures calling for a referendum on the so-called Amazon tax law requiring out-of-state Internet companies to collect sales taxes from California buyers are piling up. The necessary signatures to put the referendum on the ballot will likely be in hand well before the 90-day deadline.

The eager response on an opportunity to stop a tax comes at a time when tax talk may come back to the state capitol. Hoping for new revenue, the state budget included a failsafe — a trigger to be pulled mandating further cuts if billions in expected revenue does not show up.

Given the condition of the economy and the recent gyrations of the stock market concern is that the hoped-for money will not materialize. A rumor circulated around the Capitol yesterday that to avoid the “trigger” cuts, the governor might call a special legislative session focused on taxation.

The recently passed California Budget is a joke and based on false assumptions, including Amazon Internet Sales Taxes. There is little doubt that some adjustments will have to be made by the Governor and California Legislature since Amazon will not be collecting and remitting any taxes pror to the October 1 deadline (since by obtaining the necessary signatures, the tax is suspended.)

Whether the rumor has any validity or not, the rapid collection of signatures on the Amazon referendum sends a clear message — taxes are not welcome.

True, has invested $3 million in the signature effort and some argue that the financial support is what is driving the successful signature gathering.

However, the uncertainty over the economy has voters lining up to sign the petitions. As one voter said, ‘Saving $5 in taxes buys me another gallon of gasoline.’

Look for qualifying the referendum in record time and next June, Californians will vote on the issue – repealing the tax. One other interesting fact is that next June may see a record GOP turn out since it is possible that with a multi-candidate GOP Presidential Primary field, California will determine the Presidential nomination.

Note, the tax was sponsored by FAR LEFT Legislative Democrats at the behest and support of Wal-Mart, Barnes and Noble and Target.

We will see if those corporations will want to team up with the LEFT (haven’t they opposed Wal-Mart store construction across California) to campaign against their Republican customers.

Advocates for the Poor Urge Boycott of Over California Internet Sales Taxes

Posted Posted in Amazon Tax, Internet Sales Taxes

Good grief. It isn’t bad enough that businesses are leaving California and my income has been reduced because of this internet sales tax flap, but now the FAR LEFT low-income tax redistributionist groups are going specifically after
Advocates for the poor will urge Californians today to boycott until the online retailer begins collecting sales taxes.

Representatives of the Health and Human Services Network of California will hold a news conference at 10:30 a.m. on the Capitol’s north steps asking state residents to close their accounts until the company stops fighting a law intended to force online retailers to collect California sales taxes.

The group will be joined by Sen. Loni Hancock, D-Oakland.

The Seattle-based retailer ponied up $3 million last month to collect signatures for a referendum that would overturn Assembly Bill X1 28. Gov. Jerry Brown and lawmakers enacted the measure as part of the June budget deal to raise $200 million a year.

“We’re asking people to think before they shop on Amazon and tell Amazon what they think,” said Nancy Berlin, director of the California Partnership, which advocates for health and social service funding. “We don’t have the kind of money and power Amazon does, but collectively we’re asking our people and others in our community who share our values to put their money where their values are.”

Amazon has not collected sales taxes on California purchases since the law was passed, believing the law does not apply because the retailer ended its relationship with California-based “affiliates” who refer customers to its website. is working well within California law. What will not surprise me, will be, who is funding this group to come out and protest.

How does Wal-Mart, Target or other business competitors to sound?

Again, this law is a loser and an expensive political and legal turf war is not something that will benefit California taxpayers

Democrats Turn to Federal Internet Sales Tax Legislation for New Revenues After Debt Limit Battle

Posted 1 CommentPosted in Amazon Tax, Internet Sales Taxes

Now, the national Democrats want to tax the internet – just like in California, but now the entire country.
While the nation was captivated by the debt crisis – and whether tax increases would be part of any deal to reduce federal deficits – a group of Democratic senators and congressmen have rolled out legislation that would raise new revenues by targeting online sales from retailers like Wal-Mart and Best Buy.

These lawmakers say that states are losing billions in uncollected state and local sales tax on Internet sales and are touting the support of online retailers like Amazon who say they’re fine with an across-the-board system that would make tax collections simple.

I guess this is payback to Wal-Mart, Best Buy and Target for their advocacy of taxing Amazon in California.

OH! The big retailers turf wars.

But small businesses say the new legislation is unfair and puts them at a cost disadvantage at a time when they can least afford it.

The bill introduced by Sen. Dick Durbin, D-Ill., last week called the Main Street Fairness Act, has drawn support from several Democrats, including Sens. Tim Johnson of South Dakota, Jack Reed of Rhode Island, Reps. John Conyers of Michigan, Peter Welch of Vermont and Heath Shuler of North Carolina.

“Consumers shouldn’t have to face the burden of reporting all of their online purchases. Main Street retailers collect sales taxes on behalf of consumers, why shouldn’t online retailers do the same,” Durbin said in a statement Friday.

Durbin noted that states are expected to lose up to $24 billion in uncollected state and local taxes this year on Internet and catalog sales.

“This bill will level the playing field for local businesses, by ensuring that online retailers collect the same sales taxes that brick-and-mortar retailers already do,” Conyers said. “This will help our state and local governments avoid devastating layoffs and cuts to essential services vital to the well-being of our local communities.”

But several tech groups strongly oppose the bill.

More social justice, redistribution crap from the Dems and some big businesses will buy into it if it puts a dagger in the heart of a business rival.

How about not taxing internet sales at all?

No, the Democrats know where the money is and they want to tax, collect and spend it.

“Congress often says that small businesses are the backbone of the economic recovery, but these new collection costs will break the backs of many small online businesses,” said Steve, DelBianco, executive director of NetChoice, a tech trade group.

“It’s a cruel irony to call this job-killing bill the ‘Main Street Fairness Act,’” DelBianco added. “Online sales are about the only way small retailers can survive being steamrolled by the big-box chains who are behind this bill.”

Retailers are only required to collect sales tax in states where they also have a physical presence under a 1992 Supreme Court ruling known as the Quill decision. The high court ruled that a sales tax on out-of-state sellers would be an unconstitutional burden on interstate commerce because of the complexity of states’ and municipalities’ sales tax rules.

That means out-of-state retailers can offer their customers a discount online, but consumers have to report the sales tax owed on online purchases on their tax returns.

In response to the Quill decision, 44 states and the District of Columbia are working with local governments and the business community to adopt a sweeping interstate system to simplify their sales tax rules and administrative requirements, called the Streamlined Sales and Use Tax Agreement. So far, 24 states have changed their laws in compliance with this interstate agreement.

But the Quill decision said Congress would have to authorize such an agreement, which supporters say the bill does.

Looks like a money bill to me – for consultants, lobbyists and lawyers.

Watch the Democrats and then the Republicans milk this cash cow as and others line up to punish their competitors and screw the small business internet associate. Inc., the largest online Internet retailer, threw its support behind the bill.

“ has long supported a simple, nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location, or level of remote sales,” Paul Misener, vice president of Amazon’s global public policy, said in a letter to Durbin that the Illinois senator included in a press release.

“To this end, I am writing to thank you for your bill that would allow states that sufficiently simplify their rules to require collection of sales tax by out-of-state sellers,” he wrote.

The Retail Industry Leaders Association, which represents more than 200 retailers, also supports the bill, saying it would end special treatment for online-only retailers and relieve consumers of the tax-reporting requirement.

“For too long, U.S. tax policy has favored online-only retailers over the brick-and-mortar stores that creates the jobs and serves our communities,” said Katherine Lugar, a spokeswoman for the association.

“Government shouldn’t be picking winners and losers by giving a handful of companies a competitive advantage over everyone else,” he said. “It’s time to close this decades-old loophole and level the playing field for all retailers.”

Good luck to now in winning their California referendum while at the same time supporting the argument for a federal system of internet sales tax collection.

California’s Online Marketers Hit Hard by Amazon Internet Sales Taxes

Posted 1 CommentPosted in Amazon Tax, 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.

California Legislature and State Board of Equalization Harass California Small Business With Mary Kay Tax

Posted 2 CommentsPosted in Amazon Tax, California State Board of Equalization, Mary Kay Tax

The California Legislature and Democrat Governor Jerry Brown REALLY think they will be able to capture additional state revenue with the Amazon tax?

Their track record with the California “Mary Kay Tax” is not so good, as exposed in this piece over at Cal Watchdog.

Call it the Mary Kay Tax. It hits small businesses —  such as Mary Kay and Avon distributors — with heavy administrative costs, while bringing a pittance to the state treasury.

It’s a tax program the Legislature passed in 2009 to help balance the budget. Then it was signed into law by then-Gov. Arnold Schwarzenegger. But it has been a colossal failure as well as absurdly expensive. Despite the failure and added expense, the program is not getting the ax.

AB X4-18 created the Board of Equalization’s Qualified Purchaser Program
to collect use taxes from the smallest business owners who were not usually registered for sales and use-tax purposes.

But the taxes collected in the ensuing two years are 80 percent below projections. Adding insult to injury, the program is costing taxpayers an additional $10 million a year to administer, while adding 137 state employees.

I remember that this tax when it was passed created quite a bit of buzz in the dental community since all dental offices were required to file additional forms and paper work. As if dentists did not have enough compliance to navigate in California.

But, like everything the Democrat dominated California Legislature seems to touch there are many unintended consequences, including compliance costing almost as much as the tax revenue gain. How smart?

Despite the dismal collection numbers and the expansion of a state agency during the worst economic crisis in state history, the program is not being shelved. Because the tax was passed by the Legislature, only the Legislature can repeal it. But all is not lost. The BOE can make changes to the program.

The 2009 law requires business owners who receive only $100,000 in gross annual receipts to register with the State Board of Equalization to remit a “use tax.” But the $100,000 threshold is not the amount of income going into the business owner’s pocket. That $100,000 is the total amount of money earned by the business. Owners say that most of that money goes right back into the business to pay expenses, employees and vendors.

The motive for the tax was typical of the California Legislature. It was created to help balance the state’s budget. In these inflationary days in this expensive state, a $100,000-a-year business could be just one or two people.

The program has registered 500,000 California small business owners, targeting sole practitioners such as doctors and dentists, tax preparers and CPA’s, as well as contractors, lawyers, real estate agents and even Avon and Mary Kay cosmetics representatives.

Most of the BOE registrations have been “involuntary.” According to BOE Board Member George Runner, a former Republican state senator, this means that if BOE employees determine that an individual meets the definition of a “qualified purchaser,” the business owner is automatically registered to pay the tax.

Runner held a press conference Monday at the offices of the National Federation of Independent Business. He said that, because so few qualified purchasers have filed use tax returns with the BOE, the agency staff decided to send out 305,000 “delinquent” notices. The notices identified the small business owners as “tax delinquents,” and threatening them with “estimated use tax determinations.” According to Runner, this was done by BOE staff, without the knowledge of BOE board members.

Board members found out about the delinquent-notice mailings when more than 175,000 angry small business owners immediately flooded the agency with phone calls. The BOE legal department was consulted and quickly determined that there was no way to estimate use taxes. According to Runner, this was ample proof that the program should be drastically modified.

Runner said that most people are understandably confused about the use tax. Many area small business owners have had to hire CPAs just to navigate through the new tax process. Most small businesses do not have accounting departments. Even those with accounting departments say that accounting staff is spending far too much time on the cumbersome and confusing tax reporting.

I love it. The Sacramento Board of Equalization staffers on their own decided to call 305,000 business owners tax delinquents. Yeah, that will really help compliance. People will simply go even more underground and avoid paying any taxes.

Or, better yet, leave California for Nevada and Colorado.

Then, there is the cost of compliance to the small businesses that do remain in California. Costs that will be passed along to consumers.

“The average qualified purchaser pays almost as much to their accountant to comply with this program as they pay in use tax, resulting in much more of a burden upon businesses than benefit to the state,” Runner said. “It costs taxpayers an average of $75 for their accountant to prepare the BOE return, even though many owe far less than this amount.”

Expected to generate $264 million in the two years since the law was passed, instead the program has collected only $56 million in taxes. But it has cost a total of $23 million in additional BOE administrative costs. Add in businesses’ tax-preparation costs, which are tax-deductible, and the state well could be losing more in revenue than it gains from this program.

NFIB Executive Director John Kabateck said that his organization represents 20,000 small California businesses and 350,000 across the country. As anti-business laws continue to be imposed on California’s businesses by government bureaucracies, the game of “gotcha” government policies are fast becoming “we’re going to get you,” Kabateck said.

“Small businesses have been closing at a clip,” said Kabateck. “And there are now 2.2 million Californians unemployed.”

Kabateck said that the average small business owner spends countless hours doing paperwork costing at least $48.72 per hour, $400.00 per day and $2,000.00 per week, thanks to taxing agencies like the BOE.

And, the POLS wonder why many businesses, especially small ones, have closed up shop and moved to other states. California Legislators ponder why there are more than two million unemployed Californians.

Me thinks they should look at themselves.