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1) California's GDP is $1.9 trillion, 13% of the $15 trillion US GDP (this is more accurate in comparing consumption than population). Factoring in California's
by usaar333 15y ago
1) California's GDP is $1.9 trillion, 13% of the $15 trillion US GDP (this is more accurate in comparing consumption than population). Factoring in California's likely higher rates of online retail purchases, 14% is quite plausible.
2) There is massive fraud with use tax reporting.
http://lakeconews.com/content/view/21075/928/ http://lakeconews.com/content/view/21075/928/
$10.4 million in use tax payments were made in 2009, which would work out to be about $100 million in revenues taxed. With Amazon alone is selling $2.7 billion in CA, of which the vast majority is for out-of-state purchases that don't have sales tax. It's entirely plausible that over 95% of out of state sales are not being taxed. I'd even hypothesize that most of the use tax payments actually made are for trackable items (cars).
2a) The whole reason politicians want out of state companies to collect tax is because of the massive fraud.
- reemrevnivek 15y agoThe $2.7 billion number which I used was extrapolated from the $200 million in lost taxes. You're right, I should have used GDP, rather than population. I would have guessed that use tax fraud was common, but not "less than 1 percent of Californians currently report use tax" common. From your linked article: > Board Member Betty T. Yee said ... "the low rate of consumer compliance overall points to the need to pursue multiple efforts to promote use tax compliance so that all retail purchases – from both online and store front retailers – are treated on an equal basis." Right. Promoting citizen compliance, possibly through audits, penalties, and emphasis on income tax forms is what needs to happen here. Instead of trying to persuade their citizens to obey the law, California is trying to force Amazon to do it for them.