Amazon Tax Bill Is Gaining Favor Among S.F. Businesses

Categories: Business
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Business leaders in San Francisco are supporting the same legislation that has made economic behemoths such as Amazon threaten to leave California.

AB155, also known as the Amazon tax bill, passed the Assembly this week and now awaits the state Senate's vote. If it becomes law, online retailers will have to collect sales tax from customers who make purchases via the Internet. As of now, only brick-and-mortar businesses are held accountable for the tax.

The new law means Amazon would have to collect those taxes on Kindle sales, since the electronic book is made right here in California. Obviously, Internet businesses aren't happy. They have long fought to push back this controversial bill, which would generate some $1.1 billion in revenue.

Now that this appears to be sailing through the Legislature, Amazon and other online companies, including Overstock.com, are threatening to leave the state. Moreover, Republicans, who vociferously oppose the bill, are worried about a flurry of lawsuits.

As Assemblyman Charles Calderon (D-Whittier), who authored the bill, told the Los Angeles Times: "If you oppose this bill, you support tax evasion and are antibusiness."

But Scott Hauge, president of Small Business California, says it's a matter of fairness. "Why should an Internet sale get a 9 to 10 percent pricing advantage over a brick-and-mortar?" he asks, referring to San Francisco's 9.5 percent sales tax.

What's best, he says, is that the bill would make it the seller's responsibility to report purchases -- not the buyer's.

Steve Cornell, who owns Brownies Hardware in Nob Hill, says he believes small and big businesses are ready to see this bill become state law.

"It's saying, hey, Internet people, do all the same things we're asking in-state people to do. Nothing more, nothing less," he says. "It's not just a bunch of small businesses crying. Companies like Macy's and Home Depot are all in favor of this particular legislation."

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154443
154443

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Patrick Polski Stelmach
Patrick Polski Stelmach

Should pols legislate according to who is threatening to leave the state and/or city? Online retailers should contribute their fair share to pay for social services. They benefit from them too! Reset San Francisco wrote a great piece about the Amazon tax loophole: http://www.resetsanfrancisco.o...

krk_krk
krk_krk

Pushback to Sen. Durbin’s “Main St. Fairness” bill is justgetting started..

An Open Letter to Fiscal Conservatives in the Senate: The“Main Street Fairness Act” Is a Dead-End Street for Taxpayers and SmallBusinesses!

http://www.ntu.org/news-and-is...

Although a level playing field is in the enlightenedself-interest of all citizens, an average voter won't be easily persuaded andmore likely fall for the cynical & visceral "no net tax increase"message of the opponents.

One way to blunt the opponent’s efforts would be if theadoption of SSUTA is also accompanied by an across the board sales tax cut sothat for NOW the whole new scheme is revenue neutral, but states will balk atthat as they too can't see beyond the here & now.

krk_krk
krk_krk

Pushback to Sen. Durbin’s “Main St. Fairness” bill is justgetting started..

An Open Letter to Fiscal Conservatives in the Senate: The“Main Street Fairness Act” Is a Dead-End Street for Taxpayers and SmallBusinesses!

http://www.ntu.org/news-and-is...

Although a level playing field is in the enlightenedself-interest of all citizens, an average voter won't be easily persuaded andmore likely fall for the cynical & visceral "no net tax increase"message of the opponents.

One way to blunt the opponent’s efforts would be if theadoption of SSUTA is also accompanied by an across the board sales tax cut sothat for NOW the whole new scheme is revenue neutral, but states will balk atthat as they too can't see beyond the here & now.

krk_krk
krk_krk

Expecting legislation to end the sales tax inequity has been a sad tease for many years and all the waiting for matters to change only guarantees hollowing out of main street retail and before long Best Buy will follow Cicuit City to Big Box heaven.

All the valiant efforts to plug the pernicious inequity of the online sales tax loophole at the state level have either failed at the legislative level or have been rendered impotent by aggressive counter measures adopted by Amazon like cancelling affiliates etc.

Although the federal Main Street Fairness Act of Sen.Durbin/ Sen.Enzi might appear to be the answer, I am not sanguine about its prospects and it will likely die silently like Rep. Delahunt's efforts in the last congress. And I don’t think there will be any support from Obama who will not wish to alienate his silicon valley supporters like eBay & Google who oppose this legislation.

Therefore, the B&M retailers seeking to end the online sales tax loophole should re-think their tactics & strategy.

One way is to push for abolition of sales taxes for all items which are online buyable like electronics, books, appliances, shoes, clothes, diapers, etc. (food/groceries & prescription meds are exempt  in most states). This should garner popular support and resonate with the anti-tax sentiment of the tea party crowd.

Additionally, big box brick & mortar should spin-off their online operations and headquarter them in no-tax states and derive revenues from brand licensing, logistic services like warehousing, pickup & returns and other legal arms-length nexus-isolated arrangements where both B&M and its independent online avatar can synergestically benefit. An example would be, Barnes & Noble, there is no reason for its Big Box bookstores and Nook/eBook operations be one entity. B&M Barnes&Noble can continue as a physical bookseller while deriving revenues from an independent online Barne&Noble thru brand licensing fees etc.

Only when states face the clear & present reality of vanishing revenues will this issue garner any urgency.

Jhcesi
Jhcesi

Isn't it hypocritical of CA to want to collect the sales tax due it when it does nothing to force its businesses to pay sales tax - outside CA. What about companies, such as Dianne Tuttle at Academy Cruises & Tours who is doing business outside CA, in Florida, where she holds no Seller of Travel license, has not filed taxes, and has not paid sales tax?

When you expect people to "voluntarily" or "honor system" to pay taxes, they are not going to.

Tuttle took a deposit of $1,000 from me, did not refund the $1,000. The fact she took the money and did not return the money, and the fact I have a signed executed contract from her, confirms she conducted business in Florida. Florida confirmed she had filed no taxes or paid taxes. San Luis Obispo, CA where she works out of, city offices confirms she doesn't even have a required business license.

The California AG office basically said "Oh well!"

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