East Bay Lawmaker Defends Online Sales Tax Law

OAKLAND (KCBS)— That holiday present you bought on Amazon.com this weekend will likely cost you more next holiday season. Starting in 2012, online retailers must collect sales tax for things sold to California customers.

East Bay State Senator Loni Hancock said not collecting sales tax is simply not fair.

"Some of the big online retailers were just refusing to pay the sales tax that every one of our brick and mortar businesses has been paying forever," she said.

KCBS' Mark Seelig Reports:

Hancock was prompted to co-sponsor the tax legislation that would make it so online retailers would have to start taxing.

It was on its way to becoming law when Amazon.com, among others mounted a counter-offensive.

Halfway through the counter claim, the online industry caved and agreed to a deal that would allow the sales tax collection to begin in 2012 unless a federal law is enacted by June.

Hancock believes that by this time next year, the state will have millions of dollars in revenue due to the new tax law.

"Every bit of sales tax helps. The sales tax is going to help pay for our schools and fixing our roads and keeping our libraries open," Hancock explained.

However, some experts have said the change in law will translate to an increase in online prices to offset the cost of doing business in California.

Hancock retorted that she's not trying to destroy the online business model, but insisted that she's trying to create a more level playing field and more reason for shoppers to get out to the brick and mortar stores.

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