The problem is that web purchases are making up a larger and larger portion of our consumption and, as such, the amount of our consumption that we're paying sales taxes on is falling. That's leaving states with sales taxes with revenue shortfalls that have to be made up somehow.
California could get rid of its sales tax in favor of a hike in the income tax, but such large changes in tax policy are hard to pull off. In the meantime, California and other states are losing revenue more and more revenue to these types of sales - and there really is little they can do about it. Let's face it, this proposal sounds like a huge stretch to claim jurisdiction - a stretch that I'd think a federal court would laugh out of its chambers.
But whether this is a good solution or not, we're left at the same place: states are desperately hurting for revenue right now and it's becoming ever easier to avoid sales taxes. In the end, one of two things is likely to happen: states will get rid of their sales taxes seeing them as unenforceable in exchange for other tax hikes, or the federal government will step it to give states such jurisdiction ala http://news.cnet.com/8301-10784_3-9919420-7.html?tag=mncol
The problem is that web purchases are making up a larger and larger portion of our consumption and, as such, the amount of our consumption that we're paying sales taxes on is falling. That's leaving states with sales taxes with revenue shortfalls that have to be made up somehow.
California could get rid of its sales tax in favor of a hike in the income tax, but such large changes in tax policy are hard to pull off. In the meantime, California and other states are losing revenue more and more revenue to these types of sales - and there really is little they can do about it. Let's face it, this proposal sounds like a huge stretch to claim jurisdiction - a stretch that I'd think a federal court would laugh out of its chambers.
But whether this is a good solution or not, we're left at the same place: states are desperately hurting for revenue right now and it's becoming ever easier to avoid sales taxes. In the end, one of two things is likely to happen: states will get rid of their sales taxes seeing them as unenforceable in exchange for other tax hikes, or the federal government will step it to give states such jurisdiction ala http://news.cnet.com/8301-10784_3-9919420-7.html?tag=mncol