The “Qualified Purchasers Program” was created by the State Legislature, when it approved Assembly Bill X4 18 in 2009. I was serving as a Senator at the time and voted against the legislation. I continue to believe this new use tax collection program is a costly mistake.

To date BOE has identified more than 500,000 businesses as “qualified purchasers” and has automatically registered many of them with a “use tax” account. A qualified purchaser is defined as a service enterprise with more than $100,000 in gross receipts per calendar year that is not already registered with the Board of Equalization.

Most people are understandably confused about ‘use tax.’” The use tax applies to all Californians when you purchase items from a retailer who is not located in California and not registered to remit tax to California. Prior to the creation of the Qualified Purchaser Program, there were already two different ways for Californians to report use tax—(1) BOE Form 79b and (2) a dedicated line on state income tax forms.

My review of this new… Read More

Even as Governor Jerry Brown lifted his pen today to sign the so-called “Amazon Tax” into law, thousands of affiliates across California were losing their jobs.

Major out-of-state retailers like Amazon.com and Overstock.com are terminating their California affiliate advertising programs in response to this legislation. I’ve been warning for months that this would happen, but apparently these warnings fell on deaf ears.

The so-called ‘Amazon tax’ is truly a lose-lose proposition for California. Not only won’t we see the promised revenues, we’ll actually lose income tax revenue as affiliates move to other states.… Read More

Republican legislators achieved two great victories this week. The newly adopted budget has cut some spending so it is closer to being balanced and even more importantly taxes on working families and businesses are going down. Political battles are rarely clear cut victories and I am sure that our legislators are exhausted and perhaps wondering if all of this effort was worth the outcome. Most definitely.

Despite the best efforts to trade a tax election vote for reforms it was never going to be a clean deal. Getting liberals to vote for real reforms on pensions, CEQA, regulations or any of the other messes they created is like asking them to invite Sarah Palin out to dinner. It is not going to happen. And if the Reps did get 6 Dem Senators and 13 Dem Assemblymembers to vote with them (assuming all the reforms could be done with majority votes) there would be nothing stopping the others and their allies from sponsoring a referendum to repeal all reforms even before they take effect. The reforms proposed also are quite common sense. Nothing radical like abolishing CEQA or abolishing pensions for government workers. Therefore the impacts of these modest reforms… Read More

Governor Jerry Brown and legislative leaders are hoping that a surge in new revenues will help them avoid triggering additional budget cuts.

But it’s hard to imagine their budget numbers working when California is racing to become the nation’s unemployment leader.

We need jobs to spur revenues, but burdensome taxes, fees and regulations continue to hold back California’s economic recovery. The Governor and Legislature need to wake up to the reality that their economic policies are destroying California’s competitiveness.

If the Governor and Legislature want to see growth in revenues, they need to get Californians back to work. We need to bring private sector jobs back to California instead of driving them away.… Read More

The statewide sales and use tax rate will decrease from 8.25 percent to 7.25 percent on July 1, 2011. This is great news for overtaxed Californians, who bear the sixth highest overall tax burden in the nation. A lower sales tax will help our state’s economy and help job creation.

There’s still time for a budget deal before July 1, but it’s already too late to extend the higher sales tax. According to a June 6 Board of Equalization letter, the minimum amount of time necessary to notify retailers of a sales tax rate change is 15 days.

In May 2011 the Board of Equalization notified approximately 680,000 California retailers and out-of-state businesses that make sales in California that the statewide sales and use tax rate will decrease from 8.25 percent to 7.25 percent on July 1, 2011.

Temporary taxes often have a way of sticking around—keep in mind that the 1991 ‘temporary’ 1.25% sales tax increase is still with us today! It will be good for California if this latest sale tax hike goes away and stays away,… Read More

Today I called upon Governor Jerry Brown to veto the so-called “Amazon Tax” recently approved as a budget trailer bill by the Legislature. You can read my letter below or here.

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June 17, 2011

Dear Governor Brown:

I am writing to request your veto of Assembly Bill 28X (Blumenfield), the so-called “Amazon Tax.”

As an elected member of the State Board of Equalization, the agency responsible for use tax collection, I am concerned that in its hunger for revenues the California Legislature is traveling down a legally suspect and dangerous path. Rather than educate California taxpayers on their use tax obligations when making purchases from out-of-state sellers, the Legislature is stretching the definition of nexus to the point of absurdity and to the detriment of California’s economy and jobs.

Proponents of AB 28X claim it will “create fairness” by “leveling the playing field” between brick and mortar retailers and online sellers and generate $200 million in new revenues for the state. But in reality the measure… Read More

Make no mistake, the Democrats’ budget isn’t about solving California’s fiscal problems—it’s only goal is to ensure lawmakers keep their paychecks flowing.

When voters last fall granted Democrats their wish of majority-vote budgets, they demanded lawmakers forfeit their pay if those budgets are not approved on-time. But it was never the voters’ intention for lawmakers to approve a sham budget simply to keep their paychecks coming.

What’s worse is that to protect their own pay, Democrats are poised to sacrifice the paychecks of thousands of California small businesses known as affiliates. Up to 25,000 of these Internet entrepreneurs will lose their affiliate status if Democrats approve a so-called ‘Amazon tax.’ According to the Board of Equalization’s analysis, ‘termination of affiliate programs would have an adverse impact on state employment’ and ‘lead to lower revenues.’

The dumbest idea of all is the Democrats’ plan to sell state buildings for one-time revenue. If lawmakers want real one-time dollars, they should consider my proposals to raise billions in revenue by (1) granting an interest and penalty holiday to spur… Read More

Today I called upon the Governor and Legislature to enact a six month interest and penalty holiday to help struggling small business owners and other taxpayers who have fallen behind on tax payments during the recent economic downturn.

The state’s job is to collect taxes, not penalties and interest. Too often heavy penalties and punitive interest charges actually make it more difficult for struggling taxpayers to catch up on late payments. If we want more jobs, we need to help California’s job creators get back on their feet.

Instead of increasing taxes or cutting vital programs, we ought to learn from the experience of other states where these programs have successfully raised millions of dollars. I believe a California program would generate several billion dollars of revenues for state and local government.

A tax interest and penalty holiday would be a win-win for both California’s job creators and state coffers.

Below is the text of my letter.You can find mypress release here.

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June 10,… Read More