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State Ponders Internet Sales Tax

Could a sales tax on Internet sales help the state fill its multi-billion (B) dollar revenue gap? A lobbyist for California counties thinks so. Pat Leary is a lobbyist for the California State Association of Counties. She says: “We can no longer ignore an entire segment of the retail marketplace.”

Studies of how much state revenue is being lost because sales tax revenues are not being collected on Internet sales range widely from $200 million to well over one billion dollars. Imposing a sales tax would make a small to medium dent in the projected $34.8 billion California budget crunch. Governor Gray Davis vetoed such a tax two years ago when the state had a budget surplus and the high-tech industry was burgeoning. Now that California faces a record shortfall in revenue, governor’s spokeswoman Hilary McLean says: “We’ll be looking at all ideas.” Internet shopping nationwide is expected to reach $40 billion dollars this year compared to $30 billion last year.