July 4, 2025 Breaking News, Latest News, and Videos

Close Loopholes, Enforce Sales Tax to Ease the Crunch:

Go online today and buy a book or DVD from an independent California-based seller on Barnesandnoble.com and you will pay a bit of sales tax. Buy the same book from Amazon.com and you won’t.

Similarly, buy a jacket from Landsend.com and you’ll pay sales tax. Go to eBay and buy the identical item and chances are you won’t.

This inequity not only hurts companies that dutifully collect and pay sales taxes because it’s the law and they want to be responsible citizens, but also hits hard at schools, parks, in-home services for the elderly and infirm and everything else California government does.

No, these are not tax loopholes granted by politicians to companies that donate campaign dollars. We’ll get to those later. The sales tax problems stem purely from cheating by individual sellers and the corporations that protect them in the interest of boosting themselves a bit above their law-abiding competition, both on the ‘Net and in real-life stores.

This became a minor campaign issue last fall, when this column revealed that most California-based eBay sellers pay no sales tax and the company, under both Meg Whitman, the failed Republican candidate for governor, and her successors, has refused to provide the state Board of Equalization (CBOE) with a list of its California sellers to be compared with lists of tax-paying merchants. The company said it refuses in the interests of privacy. Translation: eBay gets a cut of every sale on its site, so even the slight reduction in sales caused by collecting and paying sales tax would cost the company more than it wants to pay.

One BOE estimate was that this cost the state about $1 billion over the past 10 years. Now the BOE has provided a figure for the overall cost of such tax evasion, including eBay and every other miscreant. It comes to about $1.45 billion per year, just under one-twelfth of the current state deficit.

So if your child’s classroom becomes more crowded next fall or if teachers at public schools disappear, and if roads become more potholed or your favorite state park closes or you can’t sign up for a course at a university or community college, you’ll know who some of the culprits are.

The state can’t force companies like eBay to cough up lists of their independent sellers, so any move to help the state collect its due – any merchant with a physical presence in California must pay sales taxes – would be voluntary. This would change if several bills now in the Sacramento hopper aiming to allow direct assessments of Internet sales to Californians should become law. When other states have tried to make this compulsory, it hasn’t worked: New York attempted in the last decade to force Amazon to turn over lists of its sellers in New York state; Amazon not only refused but moved warehouses out of that state. The same thing is happening now in cash-strapped Texas. This is one reason California has not gone hard after eBay’s sellers.

At the insistence of then-Gov. Arnold Schwarzenegger, this state in 2009 also gave tax breaks amounting to slightly more than its missing sales tax revenue to many out-of-state corporations with significant operations in California.

These include companies like Comcast, Time Warner, Roche pharmaceuticals and similar behemoths. When an initiative to rescind those breaks appeared on the ballot last year as Proposition 24, the companies spent heavily on the “no” campaign and defeated it. So California is deprived each year of $1.5 billion it previously took in. Did defeating Proposition 24 save jobs, as the big companies claimed it would?

No sooner had the votes been counted than Roche announced a layoff of 840 persons from its Genentech subsidiary in South San Francisco. Comcast, another donor, quickly announced plans to move at least 150 jobs from California to Utah, while laying off 212 California workers. Meanwhile, there is so far not a single job known to have been created or saved by those tax breaks.

But the tax reductions amount to about another twelfth of the deficit. Together, the recently created and ratified loopholes and the sales tax evasions amount to about one out of every six deficit dollars.

Maybe when voters see the final budget proposals and the new taxes needed to keep popular current programs going, they’ll rethink their sympathy for tax scofflaws like eBay and their approval of new tax breaks for big corporations.

in Opinion
<>Related Posts

SM.a.r.t.Column: Happy Fourth of July 

July 2, 2025

July 2, 2025

SMart (Santa Monica Architects for a Responsible Tomorrow) hopes you are enjoying a great 3-day weekend as part of your...

SM.a.r.t Column: Cities That Never Shut Up – The Roaring Cost of Urban Noise

June 26, 2025

June 26, 2025

In today’s cities, silence isn’t golden—it’s extinct. From sunrise to insomnia, we’re trapped in a nonstop symphony of shrieking car...

SM.a.r.t Column: Santa Monica Needs to See the Light

June 19, 2025

June 19, 2025

How Santa Monica’s Growing Light Pollution Is Eroding Human Health, Safety, and Sanity There was a time when our coastal...

SM.a.r.t Column: California’s Transit Death Spiral: How Housing Mandates Are Backfiring

June 15, 2025

June 15, 2025

California’s ambitious housing mandates were supposed to solve the affordability crisis. Instead, they’re creating a vicious cycle that’s killing public...

SM.a.r.t. Column: A City Dying by a Thousand Cuts

June 5, 2025

June 5, 2025

Santa Monica, once celebrated for its blend of coastal charm and progressive ideals, is slowly bleeding out — not from...

SM.a.r.t Column: Oops!! What Happened? And What Are You Going to Do About It?

May 29, 2025

May 29, 2025

Our Santa Monica Architects for a Responsible Tomorrow (SMa.r.t) articles have, over the past 12 years, collectively presented a critical...

SM.a.r.t Column: Why Santa Monica Might Need a Desalination Plant, and Maybe Even Nuclear Power

May 22, 2025

May 22, 2025

Santa Monica is known for its ocean views, sunny skies, and strong environmental values. But there’s a challenge on the...

SM.a.r.t Column: SMO (So Many Options) Part 3: “Pie in the Sky”

May 17, 2025

May 17, 2025

SMO: Fantasy, Fact, and the Fog of Wishful ThinkingBy someone who read the fine print Every few months, a headline...

SM.a.r.t. Column: Owner Occupancy Protects Against Corporate Over-Development

May 2, 2025

May 2, 2025

This week SMa.r.t. will have as guest columnist Mark Borenstein. Mark is a long-time Santa Monica resident, a retired attorney,...

Opinion: Declaration of Economic State of Emergency in Malibu & Pacific Palisades: A Direct Result of the Devastating Impact of the Palisades Fire

April 27, 2025

April 27, 2025

Malibu and Pacific Palisades Request Emergency Financial Measures By Ramis Sadrieh, Chairperson, Malibu Pacific Palisades Chamber of Commerce    On behalf...

SM.a.r.t Column: The World’s Happiest Cities

April 27, 2025

April 27, 2025

Almost every year, we see new cities, regions, and countries that make the list(s) of our planet’s happiest and healthiest...

SM.a.r.t Column: A City for Everyone

April 20, 2025

April 20, 2025

Santa Monica dazzles with its ocean views, sunshine, and laid-back charm. But beyond the postcard image lies a more complicated...

SM.a.r.t Column: Part II: Rebuilding Resilient Communities: Policy and Planning After the Fires

April 13, 2025

April 13, 2025

The January 2025 wildfires that devastated Pacific Palisades and Altadena left an indelible mark on Los Angeles County. Beyond the...

SM.a.r.t Column: Innovative Materials for Fire-Resistant Rebuilding After the LA Fires

April 6, 2025

April 6, 2025

In the aftermath of the devastating 2025 Los Angeles wildfires, homeowners face the daunting task of rebuilding their lives and...

Opinion: Supervisor Lindsey P. Horvath Community Column Regarding a More Accountable Homeless Services System

April 3, 2025

April 3, 2025

By Lindsay Horvath, Los Angeles Board of Supervisors This week marks a significant milestone in our fight to end homelessness...