17,000 Small Businesses Oppose E-Taxation

Bill LaMarr
Executive Director of the California Small Business Alliance

In
the mad scramble to deal with the state’s budget deficit our Legislature would
have you believe that taxing internet sales is the equivalent of the goose that
laid the golden egg – that it will produce revenue for the state without a cost
to anyone in California.

And
if you believe that, perhaps we can get the tooth fairy to take care of the
rest of the budget.

AB
28X – now headed to the Governor’s desk – would place new tax burdens on
Internet sales and is a direct threat to small business and Internet
entrepreneurship. The California Small Business Alliance is a member of the
Coalition to Protect Small Business Jobs, calling upon Governor Brown to veto
the e-taxation bill approved by the California Legislature.

If AB
28X is signed, similar bills across the country will follow, and this would be
an accounting nightmare for small business owners. Unlike larger retail chains
with large accounting staffs and in-house legal counsel, small businesses
simply do not have the resources to contend with calculating, collecting and
remitting taxes to thousands upon thousands of tax jurisdictions across the
country. It would be a competitive disadvantage for small retailers and would
force many of them to close their doors.

That’s
why more than 17,000 small businesses in California sent letters to their
California state representatives in opposition to this legislation. Perhaps the
manager of Liz’s Antique Hardware Store in Los Angeles said it best: "Without adequate protections for small
businesses, this bill and bills like it across the country would make it even
harder for us to compete with big retailers on the web, our last frontier for a
more level playing field
."

Small
businesses create two of every three new jobs and account for more than half of
all private sector jobs. As we struggle to recover from this recession,
protecting the ability of small businesses to flourish on the Web should be of
paramount concern to everyone.

The irony
of this proposal is that instead of producing more tax revenues, this unfair
new tax burden would fall disproportionately on small businesses as well as
individual taxpayers, resulting in fewer jobs and less state and local tax
revenue.

The
State Board of Equalization has reported that the proposal’s already-small
revenue estimates are subject to "considerable uncertainty," don’t fully
represent the likely loss of personal income to Californians and businesses,
and would be subject to years of delay as a result of expected litigation.  

The
revenue figures for AB 28X are uncertain at best and this bill represents
exactly the kind of budget gimmicks that Governor Brown is trying to correct.
That’s why we’re hopeful that Governor Brown to veto this legislation and
request the legislature to adopt real measures that will protect small business
entrepreneurs.

So, if small businesses get hurt and the
state’s coffers see fewer revenues, who really benefits from taxing the
Internet?
The out of state retailers will still continue to sell into
California: They’ll just switch to out-of-state marketplaces to do so. And
there you have the only beneficiaries of AB 28X.

More information is available at
www.ProtectSmallBusinessJobs.com.

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