Internet sales tax could ease California deficit

[Commentary] Dear Gov. Jerry Brown: As you've been so busy, you may have missed some data points of relevance as you put your budget together: U.S. Internet sales are growing by 10 percent annually. By the time you do, or do not run for re-election, in 2014, they will have grown to $250 billion, according to Forrester Research.

Had online retail companies, like Amazon.com, paid sales tax in the four years from December 2005 to December 2009, according to the State Board of Equalization, California would have captured $600 million in revenue. In its last quarter, Amazon recorded $7.56 billion in revenue, and a 16 percent increase in earnings. With its Kindles flying off the shelves this holiday season, one suspects its next reported revenue and profit will be even greater. In October, the Texas comptroller's office sent Amazon a $269 million bill covering four years of unpaid sales taxes. Amazon will probably fight it, as it has in other states like New York, whose legislated imposition of a sales tax on online retailers like Amazon that have no physical presence in the state, was upheld by a court in November. Rhode Island, North Carolina and Colorado have taken on Amazon and other non-taxpaying e-tailers, and Illinois is about to. California might have joined with these others, had your predecessor not gone all girlie-man in the face of threats from the likes of Utah's Overstock.com to pull its affiliate business out of the state if he didn't veto an Internet tax bill by Assemblywoman Nancy Skinner, D-Berkeley, in 2009. Subsequent attempts have fared no better.