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One Way 'Cliff" Talks Could Help California Budget

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    NEWSLETTERS

    The talks in Washington DC to avert the "fiscal cliff" are all about the federal government -- and how to change federal taxes and spending in a way that the White House and House Republicans can live with.

    But with federal leaders considering tax policy, they should think hard about the states -- and a way to help the California state budget.

    One way is legislation that would permit states to force Internet retailers -- even and especially those out of state -- to collect state sales tax.

    You've probably read about Amazon's decision to cut a deal with California and collect such sales tax on online purchases.

    But state officials say that other online retailers -- those who, unlike Amazon, don't have a physical presence in the state -- still aren't collecting the tax. Californians who purchase goods online are required to pay use tax instead, but few do.

    Estimates are that the state of California would get a significant boost in revenues -- upwards of $1 billion -- if the federal government permitted states to collect sales tax on those on-line purchases made by Californians.

    It's an issue the feds should be discussing as they figure out how to avoid the fiscal cliff.

    Lead Prop Zero blogger Joe Mathews is California editor at Zocalo Public Square, a fellow at Arizona State University’s Center for Social Cohesion, and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (University of California, 2010).

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