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California Booksellers Unite For Internet Tax

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Sept 27 – Oct 3, 2010 Edition California Booksellers Unite For Internet Tax

The Northern California Independent Booksellers Association, the Southern California Independent Booksellers Association, and the American Booksellers Association have contacted California Governor Arnold Schwarzenegger’s office and ask him to support the “affiliate nexus” (sales tax fairness) provision in the state’s budget.

State budget talks have swung into high gear, and in the proposed state budget package, there is a sales tax fairness provision that mirrors the New York State “affiliate nexus” law. If the provision goes into effect in California, online retailers such as Amazon will be forced to collect state sales tax for purchases made by state residents.

The booksellers are urging members to call the governor’s office in support of the provision, which they say would support businesses of all sizes by requiring out-of-state retailers with nexus in the state to play by the same rules as in-state retailers. Out of state competitors currently have a price advantage over in-state businesses because they are not required to pay sales tax on Internet sales unless they have an actual presence in the state.

The economic impact of the current sales tax inequity on California businesses has been profound, and it is significantly affecting businesses’ ability to foster job creation and continued growth, the booksellers say.

“This is not a new tax, the affiliate nexus provision merely stipulates who is responsible for collecting and remitting the sales tax: the remote retailer or the consumer,” the booksellers point out. They say that New York State, which passed an Internet tax law in 2008 collected $70 million in sales tax revenue that otherwise would have otherwise been lost.