Originally posted on www.StopETaxes.com.

Last year, when Gov. Arnold Schwarzenegger vetoed a proposal (AB 178) to extend the sales tax to all online sales, the California legislature vowed a rematch.  That time has now come.

Currently in Special Session, lawmakers have taken the language from last year's measure and inserted it into a new bill (ABX8 8), pushing a tax hike under the guise that they are simply clarifying current tax law.  The affiliate nexus tax (or "Amazon" tax) has been tossed back and forth between legislative chambers, but now is scheduled for final passage in the State Assembly.

While vetoing the bill last year, Gov. Schwarzenegger rightly noted that it will cause much more harm to California businesses than it will do to raise revenue. Since the bill assumes out-of-state retailers who advertise with in-state websites are obligated to collect tax, those out-of-state retailers can simply sever their relationships with California companies.  This means no tax collected for the state, a huge profit loss for California based advertisers, and another subsequent decline in tax revenue collected from these advertisers' profits.

This appears to be of less concern to money-hungry lawmakers in Sacramento than to maintaining current spending levels. Proponents claim the bill will raise $150 million, knowing full well for reasons above that the measure will actually raise next to nothing.  The only possible justification then is to fake tax revenue numbers to maintain current spending baselines, almost guaranteeing at least a $150 million "budget shortfall" next year - all while hurting California businesses and consumers.  This is objectively horrible and deceptive public policymaking.

In recent days, the Governor has stated his reluctance to sign off on the same bill he vetoed for good reason last year. Should this pass the Assembly, we hope he carries this veto out.

CLICK HERE to write your state lawmakers in opposition to etaxes.  Also, click here for ATR's letter to Gov. Schwarzenegger urging him to veto the bill should it pass and click here for ATR's alert to the legislature.

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