California Commission Member Open to NY Internet Sales Tax Model

A member of a new California commission that is looking to stabilize the state's budget cycles by modernizing revenue laws said he is open to pursuing an Internet Sales Tax provision similar to the one passed in April 2008 by New York State and recently affirmed in court with the dismissal of a lawsuit brought by Amazon.com [1]. Former California Assemblyman and current Santa Cruz Treasurer Fred Keeley told BTW, "My opening view of this is that, as a matter of principle, the New York [Internet sales tax] model makes sense."

At the end of October, California Governor Arnold Schwarzenegger (R) signed an executive order creating the bipartisan Commission on the 21st Century Economy [2] to examine and modernize California's out-of-date revenue laws that contribute to "feast-or-famine state budget cycles." The 12-member commission is charged with suggesting changes that will result in a revenue stream that is more stable and reflective of the state's economy. Gov. Schwarzenegger expressed the hope that the committee's recommendations will both help curtail extreme revenue swings, which have resulted in California's crippling deficits, and maintain a fair and equitable revenue structure.

"Unlike our diverse economy, our state's revenue system is the epitome of boom or bust, and right now we are paying the price," Governor Schwarzenegger said after signing the executive order. "That is why I have worked with the legislative leaders to find a long-term solution to our revenue problem."

The commission is scheduled to file a report by April 15. As to how the idea of an Internet Sales Tax provision would be met by the other members of the commission, Keeley noted that there is nothing out of bounds for discussion. "California has a $41 billion deficit," he said. "There will be talks of carbon taxes and so on. It's all on the table now."

Keeley acknowledged he needed to learn more about the Internet sales tax provision from a public policy standpoint. But, he said, "I think the time is ripe. For me, it's a matter of essential fairness [regarding the] administration of the tax... Fair and equitable treatment is the principle."

Watch for updates on this story in future editions of Bookselling This Week. --David Grogan [3]