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Walmart breaking from the ‘Amazon tax’ pack?

By Josh Richman
Tuesday, August 30th, 2011 at 4:05 pm in California State Senate, Loni Hancock, taxes.

It seems like state Sen. Loni Hancock, an architect of the “Amazon tax” that the online retailing giant is now trying to repeal, isn’t eager to call out a key ally: Walmart.

Arkansas-based Walmart, the world’s largest retailer, had been pretty gung-ho on Hancock’s and other lawmakers’ rhetoric that changing California law to ensure collection of sales taxes online was a means of “leveling the playing field” between online and brick-and-mortar businesses.

But Brisbane-based Walmart.com, the LA Times reported today, “offers hundreds of products from a third-party retailer, CSN Stores in Boston, that are sold without collecting taxes when state residents buy them. Wal-Mart insists that it’s not its responsibility to require companies that sell products through its site’s Marketplace Retailers program to collect California sales tax, even though the billing and the credit card transactions take place on Walmart.com.”

Asked for comment, Hancock, D-Berkeley sent a statement:

“The new laws are not specifically aimed at Amazon or any other particular internet company. They are aimed at creating a level playing for all companies doing business in the State of California – big and small. It’s up to the Board of Equalization to enforce the law and ensure that no company is evading its responsibility to collect and remit California sales tax.”

So: not taking a position on Walmart specifically, but leaving it up to the Board of Equalization to examine and act on the issue.

Federal law says states can tax sales only if the seller has a physical presence in the state; Californians are supposed to pay taxes on whatever they buy online, but very few actually do.

California’s new law lets the state tax board collect from any retailer with a so-called business “nexus” or connection with an affiliate inside California. Several other states have enacted similar statutes. Amazon has launched a campaign committee to put a measure on next year’s ballot to repeal the law; Hancock last week launched another tax bill that would supersede the existing law but would be passed with a 2/3 legislative majority, making it impervious to repeal by referendum.

Walmart had been poised to help fight against Amazon’s repeal referendum, but now…?

UPDATE @ 5:34 P.M.: Hancock spokesman Larry Levin and chief of staff Hans Hemann feel I’ve been unfair to the senator; they just e-mailed this statement.

Of the three legislative bills dealing with the Amazon tax situation, the one Loni authored – the so-called “long arm” provision – is the bill that gives the Board of Equalization the most wide-ranging authority and open-ended freedom to go after ALL internet sales tax scofflaws.

In fact, it was SPECIFICALLY designed to give BOE enforcement authority to determine if a company owes sales tax. The sponsor of our bill, Board of Equalization board member Betty Yee, told the LA Times that “she believes that Wal-Mart does have an obligation under the California law that took effect July 1 to collect the taxes.”

So we think your post about her was unfair. Her bill speaks for itself. It’s not fair of you to imply that she’s “taking a walk on Walmart” – as you clearly did – when her own bill is clearly and unambiguously designed to go after companies in exactly these circumstances. That is why she said in her statement that she expects the BOE to go after whoever violates the new law.

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  • RR, Senile Columnist

    Comrade Loni isn’t pals with Walmart mainly because its in-store staff hasn’t shown enthusiasm for joining unions. Some Walmart employees are unionized, but they are delivery and warehouse workers, not greeters or cashiers. Berkeley still reveres Big Bill Haywood and Joe Hill. John L. Lewis wasn’t radical enough.

  • Elwood

    What wonderful irony!

    CYA as fast as you can, Comrade Loni!

  • Michael

    I remember Ms. Hancock saying ‘we’re not doing this lightly’. I’m sure that’s wonderful consolation to the small business Amazon affiliates whose revenues just dried up because of this, ma’am.