It’s been considered before and has failed each time: placing a California state sales tax on online purchases made through internet retailers that are based outside of the state. Last time, in 2009, a bill made it through the legislature but was vetoed by Gov. Schwarzenegger. This year there is a new and improved budget deficit and a real push in Sacramento to both cut from the budget and fine new sources of revenue where ever possible. Enter the latest incarnation of an online sales tax, the “E-Fairness Legislation” that would force major online retailers, like Amazon and Overstock, to collect sales taxes on California purchases. Supporters of the bill estimate that it could generate between $250 - $500 million for the state. Perhaps not coincidentally, brick-and-mortar retailers like Barnes & Noble (a big competitor to Amazon) are supporting the online sales tax. Given the depressing budget situation that the state faces, is it time to end the internet’s the tax-free status in California?
Assemblywoman Nancy Skinner, D-14th District (Berkeley, Oakland); author of the E-Fairness legislation
Jonathan Johnson, president of Overstock.com