Close Net loophole

There’s again a bill in the Legislature, Assembly Bill 153, by Assemblywoman Nancy Skinner, D-Berkeley, that would once again attempt to close one of the largest loopholes in state tax law.

You may not know this, but Internet sales are, in fact, taxed. Customers are expected to keep track of their purchases and pay the sales tax on them when they file their state and federal income taxes.

Know anyone who does that? We didn’t think so.

The loophole is an awfully good deal for Internet retail giants like and, who can undercut brick-and-mortar companies that must add at least 8.25 percent to the cost of items. Skinner’s bill would require Internet retailers that have any physical presence in the state to collect the taxes.

E-commerce is no longer a fledgling industry in need of a subsidized environment. It grows by 10 percent annually. Last quarter, Amazon reported a 16 percent increase in earnings—and that was before its record holiday Kindle sales!

The current system is unfair to businesses that have stores, hire local workers and pay local property taxes. It also deprives the state of an estimated $150-$300 million annually, money that could be used to hire teachers and police officers. It’s time to close this loophole.