Earlier this month, the California Legislature approved the final version of a bill that would effectively end tax-dodging by online retailers like Amazon.com and Overstock.com, requiring them to collect sales taxes just like any other retailer.
Now, the provision is sitting on the desk of California Gov. Jerry Brown (D), who has to decide whether he will approve it or veto it. As of Friday, the San Francisco Chronicle reported that lawmakers who are pushing for ending the tax loophole currently are unsure of what Brown will do.
As the Associated Press reports today, ending the online sales tax loophole nationwide could bring in $23 billion of revenue annually. In California, ending this loophole for just one retailer — Amazon.com — would bring in enough revenue to reverse the state’s cuts to child welfare services:
State governments across the country are laying off teachers, closing public libraries and parks, and reducing health care services, but there is one place they could get $23 billion a year if they could only agree how to do it: Internet retailers such as Amazon.com. That’s enough to pay for the salaries of more than 46,000 teachers, according to the U.S. Bureau of Labor Statistics. In California, the amount of uncollected taxes from Amazon sales alone is roughly the same amount cut from child welfare services in the current state budget.
Amazon has previously responded to legislative efforts to close the tax loophole by threatening to cut ties to affiliates in the state of California. Some estimates say that California could collect as much as $1.1 billion annually from online retailers if it closed the online sales tax loophole.