Robert Ingenito, Chief of Revenue Estimates, California State Board of Equalization
While the Amazon Online Sales Tax legislation is in “suspense,” Americans for Tax Reform make this point – the legislation will require a 2/3’rds super majority in the California Legislature.
As it would happen, proponents of AB 153 are operating under the faulty assumption that approval can be had with a simple majority vote of the legislature. Not so fast. As a result of Proposition 26, which California voters approved with over 52% of the vote just last November, lawmakers can no longer get around the two-thirds majority vote requirement to raise taxes simply by denying that what they are imposing is, in fact, a tax increase. Yet that is precisely what Skinner and company are doing in attempting to pass AB 153 with a simple majority vote. Skinner herself claims that AB 153 will yield an additional $250-500 million in taxpayer dollars for state coffers in year one. Objective analysis can only conclude that Rep. Skinner would ultimately find her simple majority assumption to be as valid her assertion that her bill wouldn’t cost jobs.
Proposition 26 amended the California constitution so that – according to the language of the law – “Any change in state statute which results in a taxpayer paying a higher tax,” which is the goal and purpose of AB 153, is subject to a two-thirds vote requirement. Online sales tax proponents might have had a shot at getting a simple majority, not so with a two-thirds threshold.
Yes, this is my reading of the law. A two-thirds vote will be required for passage in the Assembly and State Senate. This means there will have to be some Republican votes – a highly unlikely occurrence.
And, the passage of Proposition 26 was a little heralded silver-lining in the GOP wipe out in last November’s California election. This little proposition will have long-lasting impacts on the growth of California government.