4 ms·
I'm not going to argue whether Amazon (and other online merchants) should be forced to collect sales taxes in California, whether it's an ethical or legal respo
by orijing 16y ago
I'm not going to argue whether Amazon (and other online merchants) should be forced to collect sales taxes in California, whether it's an ethical or legal responsibility, but it's definitely in California's interest to do so, and not just in the obvious way.
The obvious benefit for CA is that it can collect more sales taxes from online purchases from companies like Amazon who have historically not collected the taxes. But a less obvious benefit is that it tilts the playing field so that merchants currently based in CA are better off (relative to itself without the tax) competitively. Additionally, companies that have avoided presence/nexus in California for the sole purpose of avoiding the tax will have less disincentives for avoiding California. As a result, perhaps more companies will open branches in California, either for sales, distribution, or development; and merchants already with presence in California will do relatively better than otherwise.
I can see why California would want to push for such a tax.
- thaumaturgy 16y agoThe problem is that it doesn't actually work out that way. The proposed bill is only expanding the requirements to cover companies with "sister companies" in California -- i.e., affiliates. We've already seen this play out a few times. We know exactly what happens if the bill passes: Amazon cancels all of its affiliate contracts in California. California residents still do not pay taxes on Amazon purchases, Amazon no longer has any presence at all in the state, the state makes no extra money, and the competitive field is still left unchanged for local businesses. It's a net loss for California.
- deleted 16y ago[deleted]
- sbalea 16y agoIn addition, businesses that depend on affiliate relationships close down or move shop, and California loses some existing tax revenue.