According to LA Times, lawmakers in my home state of California are hoping to bring in over $150 per year in new revenue by levying sales taxes on purchases made online from businesses without a physical presence in the state. The company that would be hit hardest by this new law would be Amazon, who has had a competitive advantage over retail stores in California for years thanks to a 1992 Supreme Court decision.
Consumers here are required to pay sales tax on the goods they purchase at Amazon but almost never do, because the state has no mechanism for tracking Amazon purchases and collecting the money.
Now California is one of several cash-strapped states exploring a novel legal strategy that could force Amazon and others like it, including Overstock.com, to start collecting tax from their customers. New York launched the effort with a law that took effect in 2008. North Carolina and Rhode Island have passed similar laws; other proposals have advanced in the statehouses of Virginia, Illinois, Colorado and Hawaii.
The Democrats who control California's Legislature plan to put their own bid on the governor's desk this month in hopes of reaping up to $150 million annually for state and local coffers. The revenue would make only a tiny dent in the state's $20-billion deficit, but supporters say every dollar counts in tight times, and there's a principle at stake.
