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August 26, 2011 > Online tax collection law referendum

Online tax collection law referendum

Submitted By Francis Taylor

Jerome E. Horton, Chairman of the California Board of Equalization, made the following statement on July 18, 2011, regarding Attorney General Kamala D. Harris' granting of Title and Summary to the proposed referendum against ABx1 28 submitted by Amazon. ABx1 28 requires out-of-state online retailers who meet the criteria of the law to register with the BOE and collect and remit the use tax. ABx1 28 creates a use tax reporting requirement for out-of-state companies whether they collect the tax from their customers or not and mandates the Board to enforce the law.

"The battle has begun between out-of-state retailers who prefer to skirt the law rather than abide by California's use tax laws and those businesses that comply with the tax laws, employ Californians and contribute to the well being of California's essential services provided for our citizens.

"This is a question of equity and fairness; will out-of-state companies have to pay their fair share and contribute to the essential services of California or can they exploit California's consumer market without contributing to California's infrastructure?" Horton said.

"Non-California companies that currently fail to comply with our tax laws cost California approximately $12.5 billion in sales, $1.1 billion in use taxes and hundreds of millions in related taxes. This equates to a loss of tens of thousands of jobs for Californians and millions in needed revenues for public safety, education and transportation. Voters may indeed get to decide this issue and I believe the side of right will win and Amazon will lose."

"If signed by the required number of registered voters and filed with the Secretary of State, this petition, organized by Amazon, will place on the statewide ballot a challenge to an existing state law. The law must be approved by voters at the next statewide election to remain in effect. The law expands the definition of retailers considered 'engaged in business' in California to include certain Internet retailers selling to California consumers, so that out-of-state Internet retailers also collect existing sales or use taxes," said California Attorney General Kamala D. Harris.

"We're pleased that the California Jobs and Investment Referendum continues to move forward. We will begin participating in the process of collecting the signatures needed to have this jobs referendum on next year's ballot. With state unemployment at well over 11 percent, we're glad the people of California now have an opportunity to have their voices heard on this issue," responded Mary Osako, Amazon Spokesperson, in regards to Harris' decision to move forward with the California Jobs and Investment Referendum.

For more information on other taxes and fees in California, visit www.taxes.ca.gov and www.boe.ca.gov

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