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California Lawmakers Propose Internet Tax

Published May 26, 2010

SACRAMENTO, CA (BRAIN)-California state legislators are proposing $4.9 billion in new tax hikes, including requiring online retailers to report their California sales to state tax authorities monthly.

The online tax bill, Assembly Bill 2078, introduced by Assembly Member Charles Calderon, also requires online retailers to notify California customers of tax owed on their purchases. The bill is similar to Colorado House Bill 1193, which was signed into law March 1. These Internet tax laws are also called Amazon laws.

Most states currently require online businesses to collect sales tax from customers in states where they have affiliates. Like the Colorado bill, the California bill requires online businesses with no California affiliates to notify customers that they owe sales tax to California.

According to The Sacramento Bee, the bill was watered down in Assembly committee, but Senate aides are pushing an earlier version of the bill requiring online retailers to give the names, addresses and purchase details of transactions to California authorities each month. The Senate budget committee estimates the state could generate at least $100 million annually and even out the playing field between Internet and brick-and-mortar retailers.

—Matt Wiebe
mwiebe@bicycleretailer.com

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