posted on October 11, 2003 05:58:30 PM new
What's this all about?!
Laws aim to collect taxes for online buys
Davis signs the Internet tax bills despite a Schwarzenegger request not to sign any more legislation.
By Ed Fletcher -- Bee Capitol Bureau
Published 2:15 a.m. PDT Saturday, October 11, 2003
The lure of tax-free Internet purchases for Californians is fading as a result of two bills signed this week by Gov. Gray Davis.
While current law requires residents to pay a "use" tax on goods bought online, many buyers overlook or ignore the obligation. SB 1009 is intended to help the state collect more of this revenue by allowing buyers to pay the levy instead on their personal income-tax forms.
The legislation also requires companies that do business in the state to collect sales taxes on goods they sell online. Currently, businesses that do not have a physical presence in the state are not obligated to charge sales taxes on their Internet sales.
Another bill, SB 157, allows California to join a group of 38 other states working to unify sales tax requirements on Internet purchases until Congress addresses the issue.
Davis signed the measures late Thursday despite a request by GOP Gov.-elect Arnold Schwarzenegger that the lame-duck governor not sign any more pending bills. Aides to the Democratic governor have said that he will continue acting on legislation while he remains in office.
Schwarzenegger is expected to take the oath of office within 10 days after Nov. 15, assuming the post-election certification process takes the full 39 days allowed by law. Meanwhile, Monday is the last day for Davis to act on legislation passed this year, and any bills remaining on his desk after the deadline would become law without his signature.
The Internet-related bills reflect a change in the state's e-commerce policy. For years, lawmakers said Internet sales should be nurtured as online business grew. Now, many believe it is time to take away the training wheels.
"This isn't about 'taxing the Internet.' It's about tax fairness, because people should be taxed on what they buy, not on how they buy it," said Sen. Debra Bowen, D-Marina del Rey, who sponsored SB 157.
Sen. Deirdre Alpert, D-Coronado, who sponsored SB 1009, said the law would help "Californians to do the right thing" by making it easier to pay use taxes on Internet purchases.
By just adding a line to income-tax forms, the state stands to collect an additional $13 million in the upcoming budget year, officials said. The amount is based on an assumption that 1 percent of Californians will begin paying the use tax -- a figure similar to what other states have collected through similar measures.
"Republicans and some Democrats oppose raising taxes, but the governor and I agree that collecting taxes that are already owed is the right thing to do," Alpert said in a prepared statement. "Buying from catalogs or over the Internet has never been tax-free."
SB 157 allows the state to join the national Streamlined Sales Tax Project, an effort to create uniform sales-tax laws in order to tax all e-commerce sales.
Currently, tax laws vary greatly from state to state -- not only in the amount, but also in what is considered a taxable good -- making it onerous on businesses selling goods over the Internet to charge the correct amount and send those dollars to state governments.
Bowen said the project addresses a fairness issue.
"There's no reason why you should have to pay sales taxes when you buy something at the mall, while your neighbor who shops from a catalog or over the Internet from the comfort of her living room can buy the exact same thing without having to pay the same taxes," Bowen said in a prepared statement.
The Legislature and the governor would have to take action before any California sales tax laws are changed. Seven California officials -- two state senators, two Assembly members and one representative each from the state Franchise Tax Board, the Board of Equalization and the Department of Finance -- would share one vote in the 39-state body.
While proponents say the new laws address fairness, opponents say the measures are simply about generating new income for the state.
"They are not interested in tax equity. They are interested in more revenue," Jon Coupal, president of the Howard Jarvis Taxpayers Association, said in a recent interview.
posted on October 11, 2003 10:53:36 PM new
I don't see the big deal here, I am kind of surprised that a purchase made in California from a California company online would make you liable for taxes. When I lived there (thank God I got out) I would collect sales tax on all ebay sales to all Californians, unless they faxed me their reseller ID. I would have thought those selling online instate and not collecting taxes would have been breaking the law. Now, if a company tried to charge me tax outside of California, I would have an issue with that!
posted on October 11, 2003 11:05:16 PM new
Do they charge sales tax at garage sales??? Estate sales? Flea Markets??? Will they??? I doubt it. some of us aren't high volume sellers. Ebay is used almost as an online garage sale. Can you imagine how this is going to hurt the little guy. The ones that use selling online just to make a few bucks to make ends meet a little easier?????????
posted on October 11, 2003 11:20:59 PM new
ahc3: If the powers that be have their say, it won't be limited to "sales in California to Californians must collect sales tax". That is already the law.
What Congress wants to do, nationwide, is force us to collect tax and report it regardless of where it goes. They just can't decide if the state where the sale takes place should get the procedes, or if it should go to a central area for disbursement, or if we should have to keep records and be responsible for sending all monies to states involved.
Thank goodness the "real" businesses online have been fighting the last one as a nightmare for accountants everywhere.
posted on October 12, 2003 12:42:42 AM new
Just because they "don't" charge tax at a flea market does not mean they are not supposed to. If you are selling items and sales tax exists, you are supposed to collect the tax.
As for a national tax, we'll see how that goes. I know they want to charge it, but they want to do a lot of things that may not happen, or at least any time soon. I am not worried about what may or may not happpen a few years down the line. My guess is that to make such a tax work, they will have to give a decent percentage to the collector to compensate for the paperwork. It just might be worth your while to collect the tax. It won't fly if they only offer what California gave me, like 1/4 of 1%
posted on October 12, 2003 03:32:08 AM new
How many of those fleamarket people have a business license?
It was that big a deal, the sate would enforce sales tax....
I still think this will be tied to those that have business licenses tied to states with sales tax...
You can whine all day about... "Well you sell you should have a license" Which I think you should... but until the state enforces that end of it, they can't enforce the sales tax issue.
posted on October 12, 2003 06:02:38 AM new
first,if this goes thru,they can ask ebay to collect the state tax based on where the buyer and sellers reside.
it will be ebay which remit the proceeds to individual states.
second,some garage sales are really a retail business,every weekend they run a garage sales selling new items,there has been stories of state/city inspectors visiting these garage sales .
for the brick and mortar retailers who sell on ebay as well,if they get audited by irs,it can ask ebay to furnish the sales data .it may take awhile for ebay to come up with the data,but it can and it will.
posted on October 12, 2003 06:11:13 AM new
This bill puts a line on the CA personal income tax form that will allow for the collection of unpaid sales tax. We've always been obliged to report untaxed purchases, this just streamlines it for the 1% that would report it.
The devil is in the details regarding the "national" sales tax. Sure, they all want to grab the $, this viewer hopes they'll never figure out how to divvy up the plunder.
dd
posted on October 12, 2003 06:34:36 AM new
i would say the burden would be placed on the venue provider to collect the sales tax.
it could be a nice tidy sum of revenue for these states which are so strapped with financial problems.
i just dont see how california can balance its budget by avoiding the property tax issue??
-sig file -------The thrill is gone!!
posted on October 12, 2003 10:36:29 AM new
The state does enforce the sales tax provisions within the state including the requirement that flea marketers have either a one time temporary sellers permit or if in the business of selling at flea markets a valid California Sellers Permit also known as a resale license. The state also monitors garage sales (they scour the classifieds looking for repeat or continual sellers) and send inspectors out on weekends to monitor these sales. They are also monitored by IRS, EDD, OSHA, and other various state and federal departments. I have always collected sales tax on in state sales as well as filing all required reports and and make payments in a timely manner. To do any less would leave one open to numerous penalties and complicate your life.
Republican, the other white meat!
posted on October 12, 2003 04:29:10 PM new
If you have a Sellers Permit, you must by law collect sales tax from any sales in CA. By the way Arnie didn't read the state constitution. It really doesn't make any difference if Gray Davis signs them or not. They will go into effect today 10/12/03m signed or not signed. Davis vetoed 4 bills on Saturday
Democrate are tasty with Old Hickory BBQ Sauce.
[ edited by sanmar on Oct 12, 2003 04:29 PM ]
posted on October 12, 2003 07:14:54 PM new
12 pole,,,,,YOU! Have NEVER,,,,,,,, been a swap meet seller. Stick to what you know. You know NOTHING here.
I am a TAX paying STATE Board of EQUALIZATION, State of Cal i for nia seller! You don't pay them and poof! You will NOT,,,,,,,,,sell anymore! They will,,,,,,,,revoke your permit and inform the swapmeet! You will NOT sell at their location. ( I am NOT exempt.)
And,,,,,,,further more YOU will have a Business license for that,,,,,,City! The City of Huntington Beach,,,,the Bus. fee is $120.00! per year!
And,,,,,,,,,,for ANYONE who is a Veteran,,,,,you produce your DD 214 and you are EXEMPT from this fee anywhere in the UNITED STATES OF AMERICA!!! (They,,,the Cities are NOT happy to GIVE you your earned exemption, They Make NO money, they are evasive until you shuve the LAW down their throats! )
This is NOT only for being a Swap meeter,,,,,you can own a 7-11 and NOT pay a City Business lic. fee.
I also have a Disabled Veterans plate on my car. I pay 0 fees! Exempt.(By the way,,,,I,,,,,did NOT! ask for any exemption,,,,,Th D.M.V. looked at me and asked if I was disabled per the Government,,,I merely produced the proper documentation.) I have more than one vehicle and I DO and WILL be paying that triple fees on my Other Vehicles. And That is why I back the NO 3 times on our Vehicle fees. From $500.00 to $1500.00!!!!!!! insane!!!!!
posted on October 12, 2003 07:23:57 PM new
I live in Kentucky and have collected sales tax at the flea market for the last ten years. If you have a tax number you are suposed to collect sales tax on what you sell unless you sell to someone else who has a tax number. I had a tax number in Florida and collected tax for ten years there as well also at the flea market.
posted on October 12, 2003 07:59:32 PM new
All the flea market sellers in CA HAVE to have a resale license. The flea markets let newbies slide one time and then insist on it. No seller would dare ask a buyer to pay the CA sales tax as they would probably put down the item and walk away in disgust.
-------------- sig file ----------- *There is no conclusive evidence that life is serious*
posted on October 12, 2003 11:35:19 PM new
And in the city of Chicago, you HAVE to buy a vendor's permit if you are doing even one crafts bazzare within city limits. It cost $25.00 a few years back- for three months - $200 fine if you got caught without it. Ask me how I know! LOL
"And All Shall be Well, and All Shall be Well, and All Manner of Things Shall be Well"
