California Tax Bill Becomes Law

Michael Garrity — Wed, 28 Sep 2011 04:00:00 GMT

It's official in the state of California; Amazon and other Internet retailers are now required to charge a state sales tax on any purchases made by California customers.

Governor Jerry Brown signed the tax collection law in hopes that it will save existing jobs and create new ones in the state.

"[This law will] create tens of thousands of jobs and inject hundreds of millions of dollars back into critical services like education and public safety in future years," says Brown.

The basis of the law comes from economic experts who predict that it will help brick-and-mortar stores with actual sales staffs compete more equally with e-commerce businesses that require far fewer people to fill orders and operate. Those in favor of the legislation claim that Amazon, based out of Seattle, was essentially receiving unfair tax advantages over physical stores because shoppers weren't required to pay a sales tax.

In addition, there are expectations that Amazon will open a distribution center in California that currently hosts about 20 percent of the company's market. Amazon said that they plan to bring approximately 10,000 new jobs to the state, as well as invest $500 million over the next few years.

Initially, the e-commerce giant was planning on presenting a referendum that would ask voters to overturn the sales tax collection law that took effect on July 1, but they eventually compromised with national retail chains like Walmart and Target, as well as local and/or independent stores. Now, though the bill will take immediate effect, collecting sales taxes won't be required until September 15, 2012.

"The new law is a big victory for Main Street retailers that have battled to close a loophole that gives Amazon and other e-tailers special treatment in the tax code," says the Retail Industry Leaders Association, the group that is currently lobbying for similar laws across the country.

I can't help but wonder, though, if Walmart counts as a "Main Street retailer."

Illinois Governor Signs Internet Sales Tax Law

Mike Phillips — Thu, 10 Mar 2011 21:11:00 GMT

Illinois Governor Pat Quinn today signed into law the Internet sales tax, or "Amazon" tax. Like other states before Illinois, many sizable businesses have dreaded such a move ever taking place. In fact, two prominent Illinois Internet businesses previously made threats to leave the state if the law were enacted.

Tim Storm, CEO of FatWallet.com previously said, ""I started (my business) in Wisconsin, but moved to Illinois because it is home. I can literally see Wisconsin from my window – it’s five miles away. If I have to move, I will."

Storm was joined by CouponCabin CEO Scott Kluth in saying, "We’ve grown 100 percent year over year in the last 7 years in revenue, we’re anticipating 54 percent this year. I can’t lose a third of my business and continue to grow and walk away from that growth."

Of course, Illinois can expect Amazon to sever ties with businesses in the state, as they have done in other states that have passed similar legislation.

Michael T. Carrigan, president, Illinois AFL-CIO had this to say, "The Illinois Internet tax represents much needed revenue for our state. Most states require sales tax on internet transactions. It levels the playing field for retailers who have permanent operations in our state and must charge sales tax.

"Labor has worked closely with business to address this problem in our state, to help protect jobs and grow Illinois’ economy. We were very disheartened at the attempts to stop this legislation by amazon.com who threatened businesses and working men and women at a time when jobs are precious."

Many argue, however, that the legislation does not actually increase revenue in the state but causes a loss of jobs and an overall decrease in total sales.

'Net Features : law

California Tax Bill Becomes Law

Illinois Governor Signs Internet Sales Tax Law