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Does Amazon matter? As I recall, the article talks about taxing anyone who advertises on California-based web sites (servers?). How does one tell? I was under

Does Amazon matter? As I recall, the article talks about taxing anyone who advertises on California-based web sites (servers?). How does one tell? I was under the impression Amazon had warehouses that end up delivering in most states, since I (thought I) pay tax on purchases in my state. The point is, it's not just Amazon. Amazon is a minor part of it. They're talking about causing anyone who advertises on a California website to be a California taxpayer. That's ridiculous. I'm sure I must be considered as one of the top few percent of people who pay attention to news. What happens with advertisers who are less in-tune with intra-state events? What happens with people who buy ads through an ad agency who puts their ads on California websites? What happens to direct buyers who don't know any better? Do you see what I mean now by unwilling and unknowing? And let's forget about the US Constitution. One comment here put it as "clear." It's not quite as clear as saying "the US govt has power to tax interstate commerce," but anyone I've known as a constitutional "scholar" agrees with that: The original constitution- article 1, section 8, says the US Congress has the duty and right: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; " Then later they mention that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Most people forget about that 10th amendment (and the 9th as well!) You see, the power of regulating commerce among the several states was delegated by the Constitution to the United States. It's not up to California. "Really, this needs a national solution..." No, it doesn't. California charges an income AND sales tax. Plenty of states do fine without an income tax. Plenty of states do fine without a sales tax that over-reaches authority. This is absurdity asked by a government who has no apparent concept of reality with the rest of the world.

gojomo 17y ago
It only makes outside companies a California taxpayer upon sales into California. That doesn't have to be confusing; it just makes cross-state sales more like in-state sales. In state retail sales were, for a century-plus, the norm. It's the special exemption for cross-state sales that has been arbitraged by online retailers. I don't blame them but it's not socially optimal. I wish the 9th and 10th amendments were relevant; they were effectively nullified by the courts and congress long ago. The problem is an unforeseen development -- massive cross-border retailing -- has created revenue holes for states and distorted incentives for consumers and businesses, advantaging out-of-state retailers and long shipments over local businesses. It's hard for individual states to fix, because there's an incentive for some states to defect, become islands of online/catalog retailers, and use the tax discontinuity to gain jobs by legal arbitrage -- not any true business-friendliness. (It's a bit like the competition for sports stadiums in that dimension -- it'd better if no jurisdictions offered giant subsidies, but once the bidding starts, it's hard not to match others' offers.) Congress could solve using its power to regulate interstate congress; otherwise inefficiencies and unproductive gaming between the states will continue.

gojomo 17y ago

It only makes outside companies a California taxpayer upon sales into California. That doesn't have to be confusing; it just makes cross-state sales more like in-state sales. In state retail sales were, for a century-plus, the norm. It's the special exemption for cross-state sales that has been arbitraged by online retailers. I don't blame them but it's not socially optimal. I wish the 9th and 10th amendments were relevant; they were effectively nullified by the courts and congress long ago. The problem is an unforeseen development -- massive cross-border retailing -- has created revenue holes for states and distorted incentives for consumers and businesses, advantaging out-of-state retailers and long shipments over local businesses. It's hard for individual states to fix, because there's an incentive for some states to defect, become islands of online/catalog retailers, and use the tax discontinuity to gain jobs by legal arbitrage -- not any true business-friendliness. (It's a bit like the competition for sports stadiums in that dimension -- it'd better if no jurisdictions offered giant subsidies, but once the bidding starts, it's hard not to match others' offers.) Congress could solve using its power to regulate interstate congress; otherwise inefficiencies and unproductive gaming between the states will continue.