Executive Briefings

The California Tax Man Cometh, and He's Headed for Internet Merchants

State tax collectors are preparing to crack down on renegade internet merchants who don't collect sales taxes, and nearly 100 new state auditors, lawyers and other specialists are being hired to help over the next three years.

The effort comes at a time when state and local governments are scrambling for money after cutting billions of dollars from budgets and trimming public services. The new enforcement effort is expected to bring in an estimated $317m in its first full year, and even more in subsequent years as online shopping grows.

Officials will be enforcing a controversial law passed last year that expands the kinds of online retailers that are required to collect California sales taxes on internet purchases. Currently, those taxes range from 7.25 percent to 9.75 percent, depending on where residents live.

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The effort comes at a time when state and local governments are scrambling for money after cutting billions of dollars from budgets and trimming public services. The new enforcement effort is expected to bring in an estimated $317m in its first full year, and even more in subsequent years as online shopping grows.

Officials will be enforcing a controversial law passed last year that expands the kinds of online retailers that are required to collect California sales taxes on internet purchases. Currently, those taxes range from 7.25 percent to 9.75 percent, depending on where residents live.

Read Full Article