California residents have something to smile about every time they purchase something from Amazon because they are not required to pay tax at the time of purchase. They have had it easy for some time for the simple reason that Amazon does not have an office in the state, and that is what keeps them from collecting taxes from California purchases. But California may soon be rejoicing, even as its residents wince, as lawmakers may succeed in allowing the state to collect taxes for purchases from the online company.
A couple of bills are already pending in Congress that would affect out-of-state Internet sellers if approved. Other laws that involve a number of states concern taxes on the digital downloading market, which, until a few years ago, is perceived to have grown enough to benefit the national and state budgets considerably. California, for instance, would be happy about them as it is already struggling with an $8 billion deficit.
The new tax laws are perceived to level the playing field in business and tax collection, where Internet ventures are currently viewed as having a tax edge over establishments with physical outlets. Government affairs associate Verenda Smith for the Federation of Tax Administrators, believes that the move to impose out-of-state tax collection on companies like Amazon is a moral one, seeing it as a choice between being a good American and one who cheats the government deliberately. But, as the argument goes, it would only be cheating if there are laws to break.
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