California is clobbering small
businesses with a retroactive tax grab
Los Angeles Times,
by
Editorial
Original Article
Posted By: NorthernDog,
12/28/2020 9:11:55 AM
Isabel Rubinas of Glen Ellyn, Ill., operates Lollipop Seeds, a virtual boutique that sells clothing for young children online. And like many small specialty businesses, its sales have slumped badly during the COVID-19 pandemic. It's also being clobbered by the California Department of Tax and Fee Administration, the state agency that oversees the collection of sales and use taxes. This month the CDTFA froze Rubinas' business bank account in Illinois in an effort to collect thousands of dollars in taxes on sales that Lollipop Seeds made to California shoppers through Amazon.com in 2017, 2018 and 2019. The freeze threatens to
Reply 1 - Posted by:
blueline 12/28/2020 9:24:49 AM (No. 643199)
"The party of the workin' man/woman" strikes again. Amazon gets a pass while Boss-Daddy Government goes for the jugular of the small business owner (again).
Disgusting Li(e)berals ruin everything they get near!
17 people like this.
Reply 2 - Posted by:
sunshinehorses 12/28/2020 9:27:05 AM (No. 643203)
As a small retailer, states sales taxes are a nightmare for most of us. Just doing sales taxes for ONE state is a headache but multiple states ?? This is definitely overreach by Cali, but this is nothing new. I would put Cali on my "no fly list" and not sell to anyone in the state.
13 people like this.
Reply 3 - Posted by:
HPmatt 12/28/2020 9:28:31 AM (No. 643205)
US Congress allowed this by ‘delegation’ to approve State Comptroller tax authorities to let CA, and other states to freeze bank accounts for companies not in CA or respective state. Expect to see this from IL and NY and CT too. Each State Big Brother can tap Big Amazon to have all the records to do this.
10 people like this.
Reply 4 - Posted by:
Rama41 12/28/2020 9:50:57 AM (No. 643236)
Just California being California. Until around 20 years ago, military members stationed in California paid California income tax during their tours of duty. But if they then were transferred to states, like PA, that didn't tax military income, California saw that as license to continue collecting the tax as if they'd never moved. I believe the Supreme Court, in a rare burst of sanity, finally disallowed the theft. If we all become California next week, plan on seeing similarly inventive tax schemes from your federal government.
10 people like this.
Reply 5 - Posted by:
Ken M. 12/28/2020 10:18:28 AM (No. 643264)
To add to #4's point, every time I read an article like this one, I'm reminded of when I relocated to Nevada in '92. At that time, there was a controversy over something called the "source tax". CA was trying to tax retiree's IRA distributions, even though the individual no longer lived in CA. The logic was that, since the IRA money had been earned in CA, withdrawals/distributions should be subject to CA income tax. Thank Heavens that didn't get anywhere, but just another example of their creative thinking ... it's been going on for a long time ...
10 people like this.
Reply 6 - Posted by:
earlybird 12/28/2020 11:44:45 AM (No. 643335)
The state is trying to collect sales tax on merchandise sold online to California customers via Amazon. Other states with sales taxes can do the same. In this case, Lollipop Seeds did not pay their thousands of dollars of sales taxes. It is not a retroactive tax. It is unpaid tax. Have a look at Lollipop Seeds ($46 for a toddler swim suit, etc.) and tell me they can’t afford to pay up…
https://www.shoplollipopseeds.com
2 people like this.
Reply 7 - Posted by:
earlybird 12/28/2020 11:55:39 AM (No. 643342)
Re #4, if those who were transferred to Pennsylvania maintained their legal residence in California, they would have been subject to California state income tax. Otherwise, no.
2 people like this.
Reply 8 - Posted by:
Rama41 12/28/2020 12:26:34 PM (No. 643361)
Re #7. That's right, assuming they were California residents. Among us lifers, that was rare. With over 20 moves myself, I always kept my Texas residence.
5 people like this.
Reply 9 - Posted by:
john56 12/28/2020 1:37:13 PM (No. 643405)
Thanks to the SCOTUS decision a couple years ago, out-of-state vendors are supposed to collect sales tax for out-of-state sales. I believe a number of (primarily leftist) states have entered into an agreement to collect taxes on cross-state purchases. I believe there is a minimum number of customers/sales/sales volume that you have to be subject to the taxes (for example, 100 customers, $10,000 in sales or something like that), but the laws differ between states.
If you have a physical presence (office, warehouse) in a state, you're already having to collect the sales tax.
The easiest thing would be for you as the vendor to collect your own state's sales tax. Of course, that would benefit vendors in low sales tax states and not fill the coffers of the profilgate spending states. Never mind.
2 people like this.
Reply 10 - Posted by:
JHHolliday 12/28/2020 1:57:24 PM (No. 643415)
Cali has also been floating the idea to tax people who move out of the state for ten years. They seem to be realizing that companies and productive people are leaving the state in droves while thousands of non-taxpaying Mexicans move in. Unfortunately, nothing will change until CA is a totally bankrupt failed state.
4 people like this.
Reply 11 - Posted by:
BarryNo 12/28/2020 2:09:55 PM (No. 643420)
Illegal and unethical. Small businesses have no way of controlling where goods are stored. Certainly they have no obligation to cover taxes from before the law went into effect. That's a violation of the principle of Law in America. It's why if a legislature decide to alter the statute of limitations for this or that crime - that only applies to future crimes. If someone has already passed outside the statute of limitations under the old rules (let's say, 7 years) then the new rules say 15 years - they cannot apply that to someone whoo has already passed the deadline. Only future crimes or criminals still within the statute under the old rules can be affected.
Class Action Time, I think.
1 person likes this.
Reply 12 - Posted by:
Pucky1 12/28/2020 2:41:43 PM (No. 643437)
Laches! Remember "Laches?", the legal doctrine that you waited too long.
Throw the California bums out on their Laches.
0 people like this.
Reply 13 - Posted by:
RuckusTom 12/28/2020 3:18:27 PM (No. 643460)
All part of the plan.
1 person likes this.
Reply 14 - Posted by:
OhioNick 12/28/2020 3:26:05 PM (No. 643467)
This is nothing new. The state of Ohio once tried to tax John D. Rockefeller's earnings in New York state. This action by Ohio is exactly why the Rockefeller Center was eventually built in New York City and not in Cleveland.
1 person likes this.
Reply 15 - Posted by:
MickTurn 12/29/2020 8:34:31 AM (No. 643899)
Expost-Facto laws are Unconstitutional.
0 people like this.
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The tax was actually owed by the buyer. But CA chooses to harass small mom & pop businesses that are not even located in the state.