Media reports indicate that Amazon.com and legislative leaders have struck a deal to delay implementation of the “Amazon Tax” for at least a year.

I’m withholding judgment until I see the actual language of the deal. But I can say this much: any deal must be about California jobs.

Will this deal protect California’s remaining affiliate businesses? Will it bring back the businesses destroyed by the failed ‘Amazon Tax?’

Will it encourage new investment and job creation in our state by Amazon and other online retailers? Or will it continue to punish those out-of-state companies that dare to provide jobs and income for… Read More

According to the Los Angeles Times, Governor Jerry Brown is “leaning against” a proposed deal to bring an estimated 7,000 Amazon.com jobs to California. The Governor is concerned that a deal would somehow cost the state revenue.

If the Governor truly believes the ‘Amazon Tax’ is going to generate millions in revenue for the state this year, he’s mistaken. Board of Equalization staff have determined that the projected $200 million in revenue will not materialize this year.

As of today we’re not aware of a single online retailer that has registered with BOE to collect sales tax because of AB 28X. According to Board of Equalization staff, the number of out-of-state registrations in July 2011 was actually lower than July 2010.

Additionally, should a referendum qualify for the ballot, the law would be suspended until a vote of the people in June or November of next year. That would mean the ‘Amazon Tax’ would be a guaranteed money loser this fiscal year, since terminated affiliates will pay… Read More

As reported by the Los Angeles Times, a new study provides even more bad news for California’s job creation prospects and overall budget picture. According to Economic Modeling Specialists, Inc., California has fallen from first in the nation for new business formations to a dismal rank of 50th.

According to the report’s authors:

California’s economic woes and instability have been well-documented, and this data makes another case for how bad things have gotten there. California had the most net new business establishments in 2009 (more than 12,500) and 2008 (32,000-plus); in fact, it ranked either first or second from 2001 to 2009. But the Golden State sank all the way to 50th in 2010 with more than 4,600 fewer new establishments than the previous year.

Could it be that California’s business climate has become so hostile that entrepreneurs now feel they mustleave the state in order to successfully launch a new business endeavor? This news should be a wake-up call to Governor Brown and the Legislature.… Read More

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 see.

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

Even as Governor Jerry Brown lifted his pen today to sign the so-called “Amazon Tax” into law, thousands of affiliates across California were losing their jobs.

Major out-of-state retailers like Amazon.com and Overstock.com are terminating their California affiliate advertising programs in response to this legislation. I’ve been warning for months that this would happen, but apparently these warnings fell on deaf ears.

The so-called ‘Amazon tax’ is truly a lose-lose proposition for California. Not only won’t we see the promised revenues, we’ll actually lose income tax revenue as affiliates move to other states.… Read More

The statewide sales and use tax rate will decrease from 8.25 percent to 7.25 percent on July 1, 2011. This is great news for overtaxed Californians, who bear the sixth highest overall tax burden in the nation. A lower sales tax will help our state’s economy and help job creation.

There’s still time for a budget deal before July 1, but it’s already too late to extend the higher sales tax. According to a June 6 Board of Equalization letter, the minimum amount of time necessary to notify retailers of a sales tax rate change is 15 days.

In May 2011 the Board of Equalization notified approximately 680,000 California retailers and out-of-state businesses that make sales in California that the statewide sales and use tax rate will decrease from 8.25 percent to 7.25 percent on July 1, 2011.

Temporary taxes often have a way of sticking around—keep in mind that the 1991 ‘temporary’ 1.25% sales tax increase is still with us today! It will be good for California if this latest sale tax hike goes away and stays away,… Read More

Today I called upon Governor Jerry Brown to veto the so-called “Amazon Tax” recently approved as a budget trailer bill by the Legislature. You can read my letter below or here.

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June 17, 2011

Dear Governor Brown:

I am writing to request your veto of Assembly Bill 28X (Blumenfield), the so-called “Amazon Tax.”

As an elected member of the State Board of Equalization, the agency responsible for use tax collection, I am concerned that in its hunger for revenues the California Legislature is traveling down a legally suspect and dangerous path. Rather than educate California taxpayers on their use tax obligations when making purchases from out-of-state sellers, the Legislature is stretching the definition of nexus to the point of absurdity and to the detriment of California’s economy and jobs.

Proponents of AB 28X claim it will “create fairness” by “leveling the playing field” between brick and mortar retailers and online sellers and generate $200 million in new revenues for the state. But in reality the measure… Read More

I have reviewed the Governor’s latest budget proposals related to Enterprise Zones, and they are as bad as the original proposal that would have eliminated the program altogether.

It’s Still a Tax Increase:

First of all, this would still impose a tax increase on thousands of California businesses that would be retroactive. Many of these businesses have survived thanks in large part to the Enterprise Zone program, and have kept their employees working in California during the economic recession.

High-Tech and Bio-Tech Industries Harmed:

The Governor’s limitations on tax credit carryovers would be particularly harmful to startup companies especially in the high-tech and bio-tech sectors that would be unable to utilize the Enterprise Zone tax credits.

Governor’s Enterprise Zone Plan Would Force Job Layoffs:

The small business community has reviewed the Governor’s plan and they are alarmed. A small printing firm in San Diego had this to say about it: “Thanks to Enterprise Zone tax credits, we were able to retain employees that we otherwise would have been forced to lay off… Read More