Thursday, June 30, 2011

Unintended consequences

California Governor Jerry Brown signed legislation yesterday designed to collect online tax revenue from corporations that do not have a physical presence in the state (because the Supreme Court  has ruled that such a practice is unconstitutional) by somehow tortuously redefining "company" to include any and all small satellite businesses that happen to subcontract for that corporation. 

For example, this would be akin to decreeing, say, Roy's Nuts and Bolts of California to be a subsidiary of a fictitious Iowa-based simply because Roy happened to ship a couple of odd-sized lag bolts to a customer in Oregon who ordered them online from Onlinefasteners, thus making a couple of bucks to which California obviously has no claim. and have subsequently announced that effective immediately they would be ending their affiliate programs with small California companies (estimated to be as many as 25,000) such as independent bookstores and small retail shops, meaning that many of them will now most likely be driven out of business and thus will not be contributing any more local sales and income taxes into the state's coffers.  Other online companies are expected to quickly follow suit.

In other words, greedy California not only stands to gain nothing, it's actually going to lose badly-needed tax revenue as a direct result of this ill-conceived law. 

Well done, Governor.  Enjoy your eventual heaping bowlful of nothing.


Crotalus (Dont Tread on Me) said...

The majority of voters in this state are certifiably insane, by virtue of voting this cretin back into office for a third term. We'd leave, if we could.

ImALibertarian said...

We'll be lucky if next the federal government doesn't run Amazon completely out of the country.