Assembly OKs bill to tax online retailers

Online retailers such as Amazon would be required to collect California sales and use taxes under a bill approved by the California state Assembly, potentially boosting the state's revenues by more than $1 billion a year if it becomes law.

Assemblyman Charles Calderon (D-Whittier) says his legislation evens the playing field for physical stores that operate in California and have been paying the sales tax already. "We're not imposing a new tax," he said. "What we are suggesting is a way to collect a tax that goes uncollected." AB155 extends the statewide 8.25 percent sales tax rate to purchases made from online retailers that have a presence in the state, including those that work with sister companies with offices in California. Physical stores also must charge local taxes that can range as high as an additional 2.5 percent. The measure passed 47-16 with the support of one GOP lawmaker and now heads to the Senate. Other Republicans rejected the bill because they said it would invite lawsuits, drive business out of California, and get the state entangled in the messy task of regulating the Internet.