As every professional who does business is California knows firsthand, you must pay taxes on your, or your client’s business. In fact, you have probably heard your California-based client complain that they are victims of unfair competition from corporate internet sellers such as Amazon, Overstock.com – now known as O.co – that don’t operate physical stores or warehouses in the state.
Well, the California legislature is out to change that, and bring in some much-needed state revenue at the same time. Businesses unhappy with the way Amazon, etc… escape California business taxes claim that Amazon makes it difficult for them to compete when the internet giant can undercut their prices by not collecting California’s 7.25% sales tax and additional local government levies from its shoppers. Amazon relies on very low prices and the no-tax feature to lure customers to its website.
Many Republican-leaning lobbying groups, including the California retailers group and the Los Angeles Area Chamber of Commerce, are pushing GOP legislators to freeze Amazon’s campaign to put a referendum to overturn the state’s Internet sales tax law. California’s state Senate Appropriations Committee took the language of that law, tweaking it to put it into a so-called urgency bill. As an urgency bill, the legislation would nullify the existing law, invalidating Amazon’s voter petition, and the new law would be immune from a referendum.
The passage or blockage of this law will greatly affect your clients businesses. Talk to your clients today about their thoughts on this very important issue and to see how you can assist them.