Document:California Press Release 6 June 2000 Libertarians Oppose New Internet Tax Bill

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14547 Titus Street, Suite 214
Panorama City, CA 91402
For immediate release: June 6, 2000
For additional information:
Juan Ros, Executive Director
Phone: (818) 782-8400
================================================= Libertarians oppose new Internet tax bill

SACRAMENTO -- A bill that would force out-of-state Internet retailers to collect sales taxes if the retailer has stores in California would stifle the economy, hurt consumers, and is unconstitutional, the Libertarian Party of California charged today.

The bill, AB 2412 by Carole Migden (D-San Francisco), passed the Assembly last week by a 42-32 vote and is pending before the State Senate.

"AB 2412 is the epitome of misguided tax policy. While Ms. Migden purports to 'level the playing field,' this bill is an unfair and unconstitutional tax on a sector of the economy that is generating tremendous revenues for governments," declared Libertarian state chair Mark Hinkle, referring to California's estimated $13 billion record surplus this year.

Under AB 2412, companies who maintain "brick-and-mortar" stores in California would be required to collect taxes on sales generated by those companies' Internet counterparts -- regardless of where the Internet sites are headquartered.

"Many e-commerce sites for traditional brick-and-mortar companies are purposely organized as separate corporate entities. Plus, many company websites feature items that are not even available at physical stores," Hinkle noted.

"Migden's bill ignores these facts, treating company web sites as extensions of physical stores -- thereby justifying this wrongheaded tax."

A slew of out-of-state Internet merchants who maintain stores in California would be affected under AB 2412, including:, based in New York; New Jersey's;, headquartered in Arkansas; and, located in Michigan.

"Why should Californians pay taxes to out-of-state companies?" asked Hinkle. "It's taxation without representation."

What's worse, Hinkle added, is that the poor would be disproportionately hurt under AB 2412. "Many inner-city residents use the Internet to find items that aren't available in their neighborhoods. This bill will choke access to low-cost goods for working families."

Libertarians finally object to AB 2412 because the U.S. Supreme Court has already forbidden states from taxing out- of-state commerce. "The Legislature is circumventing the courts and the federal Internet Tax Freedom Act," Hinkle concluded.

"We urge the Senate to kill this myopic, counterproductive, and unconstitutional bill -- and keep dot-com tax-free."