Posts Tagged ‘Internet’

Audacity of Greed Part 3 – Amazon. Com and the Governor of California

July 3, 2009
 Well, apparently Amazon.com’s threat to shut down their affiliate programs in states that are cracking down on Internet sales tax evasion is succeeding. On July 1, Governor Schwarzenegger vetoed the budget bill that included the provision for Internet merchants to be required to collect the same sales taxes that are required of local merchants.

In doing so, the Governor made an additional comment addressing specifically  his position on sales tax collection on Internet commerce. He spoke of Overstock.com, a shabby, bottom-feeding  Internet company which, like Amazon.com,  is also threatening to cut off their California Affiliates.

Here is what he said:

“Governor Schwarzenegger Remains Committed to No New Taxes, Announces Overstock.com Will Continue to do Business in California

 

“After passing the largest tax increase in California history, it makes absolutely no sense to go back to the taxpayers to solve the current shortfall – that’s why yesterday I vetoed the majority vote tax increase passed by the legislature. With unemployment at an all time high, we should be doing everything we can to – keep jobs and create jobs – in California. That is why my Administration immediately contacted Overstock.com when we learned of this news and, I am pleased to announce Overstock.com has reversed its decision and will continue to do business with affiliates here in California. I will continue to fight to keep jobs and businesses in California.”

 

The Governor has really jumped down a rabbit hole on this one.

 

The Governor’s statement implies that his opposition is due to his unwillingness to have a tax increase. He knows very well that the Internet sales tax issue is one of collecting an existing tax that is being evaded by Internet merchants like Amazon.com. The sales tax  is not a new tax. It has been on the books for half a century.

 

The Governor also says that he reassured Overstock.com (and presumably Amazon.com)  that he would continue to support their tax evasion [my words, not his] in order to  to protect California jobs. But neither Overstock.com nor Amazon.com employs workers in California. Instead he is giving them a tax advantage over local companies and depriving those companies that do create jobs in California to compete on a level playing field.

 

As Tennessee Williams famously said: “I smell the smell of mendacity in this room”.

 

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