Editorial boards and newspaper columnists are quick to assign
“greed” as the motive driving Amazon, eBay and others to oppose a
new law aimed at making more out-of-state online retailers collect
sales tax on behalf of the State of California. But the greediest
actor in this drama isn’t Amazon —- it’s the government.
You see, online retailers didn’t pick this fight. State
lawmakers did —- out of misguided lust for revenue they’ll never
Put aside the rhetoric and consider the facts. Under the U.S.
Constitution, state lawmakers can’t compel out-of-state retailers
to collect sales tax unless those retailers have a physical retail
presence —- known as “nexus” —- in our state. Californians are
supposed to pay use tax —- the equivalent of sales tax —- on
out-of-state purchases, but few do.
It works the same way in reverse. California businesses making
out-of-state sales in states where they have no brick-and-mortar
retail presence don’t have to register with the tax bureaucracies
in those states, collect and remit sales tax or be subject to
audits. In five states where Amazon collects and remits sales tax,
many California… Read More