Taxing Internet Sales

From the Orange County Register. California Governor Jerry “Moonbeam” Brown just signed a law taxing Internet sales. The  state Board of Equalization (whatever that is) estimates that this measure will raise some $200 million. The California Retailer’s Association is pleased.

California Retailers Association stated:  “We thank Governor Jerry Brown and the leaders in the California State Legislature who have demonstrated their leadership and commitment to California businesses by passing and signing e-fairness into law. Small and large businesses across the state have been held at a major disadvantage by the current law that out-of-state online companies like Amazon.com and Overstock.com have exploited for years. This has cost us jobs and revenues.”

So, how is it working out? Well, it would seem that Amazon.com has decided to end its affiliate advertising program with over 25,000 California websites. In their e-mail, Amazon.com explained why this was necessary.

(The bill) specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state.

We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue. We deeply regret that we must take this action.

Oh, well. It would seem that the state of California will not be seeing $200 million in revenue coming in. I wish that politicians would get it into their heads that people will try to avoid taxation.

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