Seeking Alpha

California lawmakers vote 47-16 in favor of a law that would require online retailers with a...

California lawmakers vote 47-16 in favor of a law that would require online retailers with a physical presence in the state to collect sales tax from residents. The tax could bring in as much as $83M a year, but could also lead to retaliation by online behemoths like Amazon (AMZN), Apple (AAPL) and eBay (EBAY).
Comments (4)
  • Windsun33
    , contributor
    Comments (4254) | Send Message
     
    Good luck with that. I would bet that the real number collected will be under $5 million and cost most of that for compliance enforcement.

     

    A lot of places will simply shut down any physical presence in CA.
    1 Jun 2011, 05:19 AM Reply Like
  • Richard Mackenzie
    , contributor
    Comments (453) | Send Message
     
    It's a matter of how many States do it. If it's clearly trending that way, then the on-line retailers will just have to play on a level field with the B&M guys, but still with less overhead. Hard to work up any tears for them.

     

    (Disclosure: I live in Florida, which relies on sales tax, having no state income tax).
    1 Jun 2011, 08:30 AM Reply Like
  • Poor Texan
    , contributor
    Comments (3529) | Send Message
     
    Granted, but what if the online retailers decide to offshore to Bermuda? I think the states and companies have to sit down and come up with an acceptable compromise. After years of fighting between the states and the trucking companies over licensing and fuel taxes, all finally signed on to a reciprocal agreement whereby each company could license in one state and then split licensing and other taxes based on a mileage apportionment.
    1 Jun 2011, 11:32 AM Reply Like
  • Windsun33
    , contributor
    Comments (4254) | Send Message
     
    The only way this will ever work is if a federal VAT tax is imposed, with rebates back to the states for the amount of sales, and I don't see that happening. If CA really pursued this, they would be filing lawsuits in 49 states.
    1 Jun 2011, 03:24 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|