"It would be dead as far as I am concerned," said the head of California's tax agency, the Board of Equalization.
BOE Chairman Jerome Horton told NBC LA's Ana Garcia, in an exclusive interview, that he would vote down any proposal to hire an outside company to track down shoppers who don't pay Internet sales tax and don't report it on their income taxes.
A 1992 Supreme Court decision prohibits states from collecting sales tax on purchases made from retailers who do not have an actual physical presence in the state. But -- and that's a big "but" -- there's a little thing called the "use tax" which requires unpaid sales tax to be declared on your California state income tax. Few people know that and even fewer do it.
Horton said taxing Internet shopping could generate $1.4 billion for the cash-strapped Golden State. Lawmakers in Sacramento are working on a bill to tax e-retailers, including the biggest of them all, Amazon.
Amazon.com has sales of $32 billion a year.
The bill, AB 153 (PDF), would go after Amazon by going after its affiliate businesses. Those are the California-based shops that sell on Amazon, and deliver their goods tax-free in the state. Amazon has vowed to fire all those California affiliates if the state attempts to tax Amazon.
Ana Garcia will have more on this controversial topic on the 11 p.m. news Wednesday, when she features a local bookstore caught in the middle of this taxing war.
What do you think? Should Amazon be forced to collect sales tax in California? Would you be willing to pay that tax? Comment below.