Tuesday, February 23, 2010

The California Senate Message is : "Oops! This link appears to be broken": California Senate Passes Tax Bill on Online Retailers such as Amazon.com

LawUpdates.com informs us that:

California Senate Passes Tax Bill on Online Retailers such as Amazon.com

As LawUpdates.com writes:
"The bill now goes to the State Assembly where it is likewise expected to pass....

[T]he bill requires out-of-state sellers, such as Amazon.com that pay commissions to California firms or residents for sales referrals (often through a website link) to collect use tax on their sales to California residents. According to a study issued by the State Senate, existing law requires Californians to self-report and pay the use tax on these purchases, but compliance is low [LawPundit tongue-in-cheek comment - who would have thought it?]."
The bill is intended to shore up California's disastrous finances (!) which - we might suggest - are in such dire straights principally because the California legislature has historically been populated by members who knew not what they were doing - and apparently that is still the case. But now the big spenders have run out of cash and are desperately searching for full pockets elsewhere.

We wanted to know just who these mysterious legislators were and so we went to the official website of the California State Legislature and clicked on the Map Search of California Senate Districts and then on the map of the Bay Area, where one can then allegedly click on the individual numbers of the Senate districts to find its legislative human occupier.

The joke is on YOU
as the message that we got for every district there was
(as of 4 p.m. CET):

"Oops! This link appears to be broken."

Now, citizens of this world, if the California State Legislature is not capable of keeping its website operational in this digital day and age, you can hardly expect them to run their State in any mode other than "chaos", now can you?

No one doubts that governments largely subsist by taxing whatever they can get their hands on - indeed, the United States came into being precisely because of a State-side "crowd mutiny" against an egregious instance of taxation by the British Parliament (legislators all) - The Stamp Act of 1765. You might expect some kind of a "learning curve" about this topic to have emerged among modern legislators, but apparently not in California.

Let us take an example of one of the provisions of this bill from LawUpdates.com:
"In general, an out-of-state retailer must have sufficient business presence (also known as “nexus”) in order to be required to collect and remit the tax. Under current law, a retailer is considered “engaged in business in this state” and required to collect the California use tax on sales made to California consumers when it maintains storage or warehousing facilities in the state or it has a representative or independent contractor operating in this state for the purpose of selling, delivering, installing, assembling, or the taking of orders for the tangible personal property."
To the surprise of no one, LawUpdates.com notes that:
"The CA Senate in its legislative analysis found that a contentious issue in sales and use tax administration relates to the extent to which a state may compel an out-of-state retailer to collect use taxes from its in-state customers. The issue is of considerable importance because, although Californians are required to self-report out-of-state purchases for use in this state, the compliance rate is very low."
A law like that might be called stupidity personified, but we will limit ourselves to calling it a slimy contradiction to the general principle that the Internet should not be subject to taxation:
"The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet, grandfathering existing taxes in ten states. [1] In the United States alone, some 30,000 taxing jurisdictions could otherwise have laid claim to taxes on a piece of the Internet.[2] The law, however, did not affect sales taxes applied to online purchases. These continue to be taxed at varying rates depending on the jurisdiction, in the same way that phone and mail orders are taxed."
Now, if we had such an alleged business "nexus" in California, we would move it to a neighboring State tomorrow. Needless to say, we would definitely never establish a new such business in the State of California.

Besides, the new bill as a law would - in our opinion - be clearly unconstitutional as an unreasonable restriction on the course of interstate commerce, which would slow to a standstill if every State passed similar laws. Unthinkable.

In any case, if this is an example of the way that California hopes to solve its financial problems, the California legislators should all go and get their heads examined.

We propose instead a new California Ballot Proposition to run as follows:
"Resolved: that the Legislature of the State of California be disbanded for one year, or, alternatively, until such time and place that competent legislators can be found and duly elected. Until such time, the State of California is to manage its affairs based solely on the laws already on the books .... which should not be difficult ... given the voluminous 29 titles that are already available for enforcement...."
In this manner, many millions of dollars - perhaps billions - could be instantly saved - far many more than through any Internet taxation - and, as a special bonus, even more severe legislative damage could be spared in the future since no new idiotic laws could be passed in the interim.

Some observers of course may argue that the California State Legislature is essential for the efficient operation of the State of California, but we have seen no evidence of that.

So, Californians, what about it?

Take a chance and pass a Proposition to disband the California State Legislature for one year - IMAGINE the savings! And the people of the State would probably not even notice a thing in their everyday affairs, as existing State contracts would of course be automatically renewed - but with NO increases, period - another saving of millions.

365 days later ... sadder, but wiser ... the California Legislature could then be newly reconstituted under NEW TITLE 30: Legal Sanctions for Stupid Internet-Related Legislation, which would read:
"Any California legislator actively proposing, supporting or voting for stupid Internet-related legislation will be required to undergo a one-year remedial Law School operated CLE-type course of re-education, concentrating on the purposes and methods of laws and the legislative process, especially in the context of Constitutional Law. A special intensive course on the Internet, running for six months and conducted by the EFF, is to be part of this legislative rehabilitation."

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