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Friday, March 11, 2011

AB 153 letter to editor - Mercury News

Thanks to the Mercury News for printing my letter to the editor opposing their editorial supporting the AB 153 approach to solving the online sales tax collection issue. Here it is (3/11/11):

Online sales tax bill won't fix budget mess

AB 153 is not the solution to California's budget problems (Editorial, March 9). The online sales tax bill is too easy to avoid because those subject to it can just cancel their contracts with in-state associates. And not all online retailers have in-state associates. California consumers need to pay their use tax -- there is a line on Form 540. This will help California's budget. The online sales tax matter must be addressed by California working with Congress and other states on a workable solution. A bigger sales tax issue is that California only taxes 20th Century type consumption (tangible goods) and fails to tax 21st Century type consumption (digital items and services). Real improvements would even allow for a lower sales tax rate, which could generate jobs.

Annette Nellen
Professor, Accounting and Finance, San Jose State University

  • For more on my concerns with AB 153 - 3/9/11 post
  • Testimony I submitted to 2/28/11 Assembly Revenue & Taxation Committee on AB 153 and the use tax gap - 3/1/11 post
  • Quill is not a loophole - 3/3/11 post
  • My reports on sales/use tax problems and possible remedies - here

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